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Home Owners Insurance is a complete insurance package solution that will meet most peoples insurance needs. Home insurance is not just insurance for your house and property, but rather an comprehensive insurance package aimed at providing maximum coverage for you and your family. Choosing which home insurance to purchase is likely going to be the biggest insurance decision you will make. In this guide we will look at what is included in the different types of home insurance, and just important, what is not included. We will also look at how you can save on your insurance premium by taking a few simple steps.

Home insurance usually includes four main areas of cover:

Homeowner Dwelling And Personal Property, Liability, Medical Payments and Additional Home Living Expenses.

Home Dwelling and Personal Property Coverage

Home dwelling and personal property coverage is the main insurance cover for your home and property. This insurance will cover any damage that may happen to your house or other structures on your property. If you have add on buildings on your property, such as storage sheds or similar, they are usually covered for up 10% of the agreed total insurance limit.

Personal property coverage is the part of your home insurance that cover your personal items and belongings. Included here are common household objects such as furniture, clothes, electronics, appliances and valuables. Basically anything that is on your property except for your car, which need separate auto insurance. Your total claim limit usually goes up to 50% of the total insurance limit, though this can be negotiated in both directions.

Personal Liability Coverage

Personal Liability Coverage is your insurance policy against claims made against you in the case of accidents that take place on your property. This includes personal damage and injury as well as item damage, not including damages done to a third party's car. Personal liability insurance covers all members of your family under one policy, including your family dog or other pets.

Liability insurance cover legal fees and compensation if you are ordered to pay such by a court. Liability insurance has no minimum deductible, which means you will never have to pay for any personal or items damage done to others. The usual personal liability limit is set at a maximum payout of 100.000$, but you can purchase higher limits if you need to.

Medical Payments Coverage

If the unfortunate happens and someone gets injured while at your property and need medical care, then medical payments coverage will make sure that happens, regardless to your involvement in the accident. This is the norm, but some insurance companies will only cover part of the cost if you were directly responsible. Check the fine print!

Additional Living Expenses

If you are the victim of a serious accident that renders your home unlivable for an extended period of time, then additional living expenses will take care of the costs of relocating to a motel or apartment. You are usually covered for up to 12 months of relocation while your home is being repaired. The usual; max limit for additional living expenses is 20% of your agreed total insurance limit.

Additional Coverage:

Some families may live in an area where the climate and weather put additional strain on their homes. For those of you who don't feel you have enough coverage under the typical insurance policy, there are several additional coverage policies available.

Debris Removal:

Debris removal does just what it says. If you are the victim of storms and floods, and for that reason end up with debris on your property, then this extra will pay for the cost of having it removed.

Trees, Plants and Shrubs:

If you have valuable threes, shrubs and greens on your property, you may want to insure them with this extra coverage for up to 500$

Credit Card Coverage and Identity Theft:

Some homeowners may live in areas where crime is more common than elsewhere. If you should ever be the victim of theft, then you may want to insure yourself against credit card and identity fraud, which is very common.

Mold:

Mold damage is usually not included in a regular home insurance policy, but can be purchased as an extra.

General Types Of Home Insurance

In general there are three main types of home insurance available: HO1, HO2 or HO3. HO1 is the most basic coverage type and only covers few perils. HO2 is what is considered extensive or comprehensive coverage and covers many more perils. The most common insurance type is HO3 also know as 'all perils' home insurance, because most perils are included with a few exceptions.

HO1(Basic Coverage) insures you from these perils:

Lightning and Fire

Damages to Cars and Aircrafts from Earthquakes

Mischief and Vandalism

Theft

Explosions

Riots and Civil Unrest

Smoke

Windstorm, Hail and Hurricanes

Accidental Water Damage

HO2 (Extensive Coverage) insures you against the same perils as HO1 as well as:

Building and Home collapses

Freezing Damages

Water and Steam Damages Incurred From Plumbing and Water Heating

HO3 (All Risk Coverage) covers just about all perils. It is easier summarized by the things it does NOT cover:

Property Damage from Earthquakes

Vermin Infection (mice, rats, insects)

Termites

Freezing Damages While Your House Was Unoccupied (Except if you turned of water or turned on heating)

Wind or Hail Damage To Shrubs and Trees

Vacated Home Expenses (Expenses incurred while you were away from your home for over 60 days in a row)

Maintenance (Wear and Tear)

Water Seepage Damage.

How To Choose The Right Insurance Limit?

When you purchase home insurance it is important to choose the right total insurance limit. If you choose to high a limit you will pay unnecessary premium payments and if you choose to low a limit, you will not have sufficient coverage in case of serious accidents.

In order to prepare yourself properly for choosing your total insurance limit, do the following steps before choosing:

Prepare a detailed inventory list of all belongings in your home and on your property. Gather all original receipts. When you have done this, you will have a much better idea of what limit you need.

Make an informed decision on how much personal risk you are comfortable bearing. This will affect your premium. If you choose a higher deductible you will be able to afford a higher total insurance limit.

Get a professional valuation of things were you are unsure of their values such as antiques and unique items.

What Determines The Cost Of Home Insurance? How Can You Save Money?

The main factor in home insurance cost is what general type of insurance you buy (HO1,HO2,HO3). Besides that there are several other factors that the insurance company will use to calculate your premium.

Property Age and Construction Type

Older houses generally sustain damage worse than newer houses. Because of this older houses are usually more expensive to insure than newer ones.

Credit Card Risk

Some insurance companies will do a basic credit check before giving you insurance. In some cases you may pay a credit risk premium in order to get insurance.

Deductible

The deductible is the part of your insurance claim that you must pay out of your own pocket before you can get compensation. If your insurance deductible is 200$ then any damage must cost more to repair than this in order for you to make a claim. This does not include personal liability. Deductible is the part of your insurance where you can save some money. If you choose a higher deductible you will generally have a lower premium, but be sure you can actually afford it.