Think of a homeowner's insurance policy as a complete package policy. One part of the package covers damages to your home. The second part of the package covers liability for any injuries or property damage that happens to others on your property. This would even include your pet that would happen to bite someone.
Your homeowner's insurance policy will of course cover damages from a fire, tornado and most all other natural disasters. The only exceptions to this would generally be floods and earthquakes. For coverage from these disasters you would need to obtain special coverage. Keep this in mind if you live in areas prone to flooding, or to earthquakes.
The other exception is for wear and tear to the home. Most every insurance company will exclude maintenance related claims if caused by neglect on your part. A good example of this would be a roof. If it is already worn out and in need of replacing, it most likely will be excluded in the event of wind damage that tears it off.
Be sure you have adequate homeowners insurance coverage. Don't get caught without the coverage you need. If you live on a flood plain, be sure you have flood insurance. You'll have to purchase a separate policy from your insurance agent for flood damage. If you live in an area that has frequent earthquakes, make sure you have a policy that will cover damages from them.
Homeowners insurance also provides cash for loss of use due to an insured disaster. It will pay for you and your family to temporarily live in another home or apartment and include money for clothing, food, etc.
Actual Cash Value vs. Replacement Cost
Actual cash value is the cost of replacement of the contents, minus depreciation. So the older your furniture, clothes, appliances, etc., are, the less you will get in the event of a claim.
The exception to this is to purchase replacement cost coverage. It is very inexpensive and it provides for full replacement value on your home and all of its contents. This is a very good deal indeed.
Liability
All homeowners insurance policies include coverage for liability. This would include coverage in case someone slipped and fell in the snow on your property, or a tree limb fell from your yard onto the neighbor's house and damaged their roof. These are only two examples of the importance of homeowners liability insurance.
Renters Insurance
Don't under estimate the importance of having renters insurance if you are not the owner of a home. Renters insurance will cover all of your possessions in the event of a loss, as well as give you liability coverage. Renters policies are very inexpensive and well worth having. These policies will also include coverage for loss of use in the event you can't stay in your home or apartment due to the loss.
Understanding the contents of your homeowners insurance policy is important. You don't want to wait until disaster strikes in order to find out you're not covered. Talk with your insurance agent and be sure you know what you need in the way of homeowners coverage. You'll have the peace of mind in knowing you're protected in case of a loss.
