Buying any new insurance policy can be a time-consuming and confusing undertaking, and home owner’s insurance is certainly no exception. One of the first things to remember is that insurance policies are issued on two bases: On a mono-line basis or as a package policy.
The first type, a mono-line policy, will contain just one type of coverage, such as liability coverage.
The second type, a package policy, will include several types of coverage, which can include types such as liability insurance and property insurance. In general terms, a package policy will be cheaper than separately purchased insurance coverages.
There are also tenants and homeowners’ policies are package insurance policies that typically include coverage for liability, property, medical payments and theft. Standard insurance coverage will general offer protection against any financial losses incurred as a result of such occurrences as fire, hail, tornadoes, smoke damage, vandalism and any other type of physical damage cause to either your home or belongings; theft of your personal property; coverage in the event that another person is injured on your property as a result of your or a member of your family’s negligence, or if another person’s property is damaged due to your negligence. Such occurrences would be covered by your insurance policy’s liability coverage portion.
When you are in the process of purchasing homeowners’ insurance, it is important to be aware of the various instances that cause loss that your policy will insure you against. You should then look through and determine whether you require either a basic policy, or more extensive coverage. Some types of coverage that may be excluded under a policy can be ‘bought back’ at a premium, and these types of coverage may include power interruption or earthquake damage.
Also, some types of coverage listed can be excluded, such as off-premises theft, and doing so can result in a lower premium. Some types of coverage, however, are permanently excluded, and may only be obtained through Federal insurance programs. Such types of coverage include, typically, flood insurance. Make sure that you are aware of exactly what is precluded in your premium, and make your decision as regards to home owner’s insurance coverage based on the knowledge of what you need.
