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Content
- What Is Homeowners Insurance?
- What Does Homeowners Insurance Cover?
- What Are the Types of Homeowners Insurance?
- What Isn’t Covered by Homeowners Insurance?
- Other Types of Auto Insurance
- What Factors Influence My Insurance Rate?
- What’s the Minimum Amount of Dental Insurance I need?
- What Is Proof of Insurance?
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What Is Homeowners Insurance?
Homeowners insurance is an insurance policy that combines various personal insurance protections, which can include:
- Loss or damage to your home.
- Loss or damage to its contents.
- Loss of your use of the home.
- Loss of other personal possessions.
Homeowners insurance also offers personal liability coverage in case someone is injured on your property, or if you are found responsible for damage to another person’s property.
While coverage and costs will vary among plans, most homeowners insurance policies cover four main events: fire, theft, wind damage, and water damage (excluding flooding).
Homeowners insurance is typically required if you have a mortgage on your home. Even if you own your home outright, it’s still a good idea to have this coverage to help protect your investment and belongings.
What Does Homeowners Insurance Cover?
Homeowners insurance offers financial protection for named perils on your property.
What are they? Named perils are specific events that are covered in your homeowner’s policy. These include fire, wind, water, theft, and vandalism.
Your policy will cover damage to your personal property, dwelling, or other structures you own. It will also pay for repair costs or provide you with a place to live temporarily or permanently if your property is uninhabitable.
Depending on your policy, it can also cover personal liability and medical costs related to injury or death on your property.
What Are the Types of Homeowners Insurance?
Homeowners insurance is necessary to protect your property and finances, but how do you know which is the right coverage for you?
These are the five types of homeowners insurance you can buy:
Broad form (Form 2) covers the dwelling, other structures, personal property, personal liability, and medical payments. Broad form policies only cover named perils in the policy, which means it only covers explicitly mentioned events in your contract.
Special form (Form 3) covers damage to the dwelling, other structures, personal property, personal liability, and medical payments. Special form policies take an “all perils” approach. This means your policy will cover most damages or losses, unless they are expressly excluded.
Comprehensive form (Form 5) provides the most coverage, allowing for additional named coverage for possessions on top of the coverage offered in Special Form 3.
Modified coverage form (Form 8) is insurance for older homes, especially ones that pose more risk for homeowners insurance companies. Keep in mind that with an older home, there’s a risk of having a rebuild value that significantly exceeds the home’s market value.
Renters insurance (Form 4) covers personal property and liability for renters. It’s one of the most important types of coverage to ensure you are covered even if you don’t own the property. It can also offer owners liability coverage if someone gets hurt on their property.
What Isn't Covered by Homeowners Insurance?
Purchasing homeowners insurance is one of the most important things you can do to protect your home. However, it’s important to understand what your policy does and does not cover.
Most policies will exclude coverage for certain types of damage, such as floods and earthquakes. But, you can purchase additional coverage through riders or other policies if you live in a high-risk area.
Other standard exclusions include mold, fungus, and general wear and tear on your property.
In addition, coverage may also be excluded for specific items, such as jewelry or artwork. It’s important to read your policy carefully and discuss any questions or concerns with your agent.
Blue Cross and Blue Shield of Illinois complies with applicable Federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability, or sex.