When buying your first home, there’s a lot more to think about than getting your family from Point A to Point B. One of the biggest oversights when buying a home is overlooking homeowners insurance. Decide which policy is best for your home before it's too late. To help first-time homebuyers understand the basics, here's IKO Community Management's guide:
(A Few) Types of Homeowner Policies
Though every insurance company is different, most in Maryland, Virginia, and Washington, D.C. have the following policies:
- Dwelling coverage. This pays to repair or rebuild your home, including electrical wiring, plumbing, and HVAC, if the damage is covered by the cause of loss.
- Other structures coverage. This pays for damages to detached structures like garages, sheds, fences, and cottages on your property.
- Personal property coverage. This reimburses homeowners for their personal items, including furniture, artwork, clothes and jewelry, data, and electronics, that may be damaged or destroyed by a covered cause of loss.
- Loss of use coverage. This pays for a homeowner’s additional housing and living expenses if they must temporarily move out of their home while it’s being restored.
- Liability coverage. This helps protect any assets and covers defense costs in the event of a lawsuit because you or your family are responsible for causing injury or damage to another or their property. For example, dog bites.
What Homeowners Insurance Covers
It (usually) covers damage to structures and personal property. This damage could be caused by the following:
- Fire or lightning
- Windstorm (hurricanes and tornados)
- Weight of snow, ice, or sleet
- Riot or civil commotion
- Sudden or accidental smoke
- Aircraft or vehicle
- Falling objects
- Theft or vandalism (also known as malicious mischief)
- Freezing of plumbing, HVAC, and fire protection systems or appliances
- Artificially-generated electrical current
Many homeowners insurance companies cover more than the list above, so be sure to check with your insurance company about your policy.
What Homeowners Insurance Doesn't Cover
Homeowners insurance typically doesn’t cover damage caused by:
- Earthquakes* and earth movement (like sinkholes)
- War and acts of terrorism
- Nuclear power plant accidents
- Sewer backup
- Termite infestation
- Intentional loss
- General power failure
*For some insurance companies, there are premiums or supplemental insurance that you can purchase if you live in a flood-prone area or on a fault line.
Whether you're buying your first home or you're simply moving from one house to another, remember to purchase homeowners insurance before "in case of emergency" becomes reality.
From all of us at IKO Community Management, good luck!