Understanding Homeowners Insurance

In my last column, I explained the importance of adequately insuring your dwelling. I explained the basic forms of home policies and insurance company endorsements – company-created additions that can broaden or limit coverages. This week, I will explain the many coverages and deductibles available in a home insurance policy. I will assume you chose the basic form HO-5 policy with the broadest coverages. I also stress the importance of being a named insured.

Liability insurance is a coverage in a home insurance policy. It is designed to protect you and your family if you were to injure or cause property damage to another person, regardless if the accident was in your home or not. Like all liability policies, it is designed to protect your assets. Most people don’t know that it provides protection outside and away from your home. For example, did you ever wonder what happens if you hit someone with a golf ball? Most policies start liability coverage at $100,000. However, choosing $300,000 or $500,000 may be more adequate to protect your assets and may not cost that much.

Author: Bob Hollick

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