Types of homeowners insurance
Three main types of homeowners insurance are discussed in this article: comprehensive, liability only, and named peril policies. Make sure you have the right kind of coverage for your needs by reading through these three options!
The first insurance is called comprehensive coverage. Comprehensive covers your house and belongings against losses from natural disasters, theft, or vandalism. Typically you need to declare the value of each item covered under this policy so that it can be included in your premium calculation. You should also know that if you have a mortgage on the property, your lender may require that you insure the home for more than its purchase price.
The second type of insurance is called liability coverage. This protects other people who are injured on your property because of something you did or failed to do. For example, suppose a neighbour slips and falls on ice in front of your house. In that case, they can sue you for their medical expenses plus compensation for pain and suffering caused by the injury, suppose it’s found that you were negligent (careless), either through action or inaction. In that case, this policy will provide compensation up to the limit selected when purchased, as well as legal fees incurred during litigation against you should it be necessary. It’s important to note that liability policies typically only cover bodily injuries; property damage and other forms of loss are not included.
Named peril policies
This is the third type of home insurance available, and it’s the most popular overall. Named peril policies provide coverage for events specifically listed in your policy; you’ll want to make sure that all potential risks are included here, as exclusions (such as earthquakes and floods) do apply. This type of insurance is often referred to as “named perils” or sometimes an HO-nO (homeowners’ covered on only). So expenses incurred due to these specific circumstances will be reimbursed up to the limit selected when purchased.
Most homeowners choose this option because they believe it covers everything that could happen at their residence – but such isn’t the case! While named peril policies may sound more appealing than standard ones since there aren’t any surprise exclusions down the road, keep in mind that this type of policy doesn’t cover fire or theft.
If you’re concerned about damage due to fires, floods, storms etc., it’s important to consider purchasing additional coverage for these specific risks! While they may be more expensive than HO-nO insurance policies, the extra protection will make any damages seem like nothing in comparison! For example, if your home sustains $20k worth of water damage from a burst pipe but has featureless coverage on its plumbing system – only the first $15k is covered by insurance. The remaining balance would have to come out of pocket since it exceeds limits under featureless plans.
It is important to make sure you have the right type of coverage for your needs. If you are not sure which policy best meets your requirements, Insurance Brokers Newcastle Specialist are the best insurance brokers in Newcastle, and they will help you out. We hope you have found this article to be helpful. If so, please share it with your friends and family on social media! Have any questions about the different types of homeowners insurance policies? Give us a call on (02) 4058 1253.
Insurance Brokers Newcastle Specialist
Phone: (02) 4058 1253
Address: 7/48 Robert St, Jesmond NSW 2299
Email: [email protected]