House Insurance: Types of Coverage
Homeowners insurance protects against damage, theft, and loss of personal property. It usually covers damage and loss to the structure, contents, and interior of a house, along with other losses suffered by a home. House insurance policies typically cover the physical damage and loss of property, loss of personal property, liability for damage to others, and property damage. Three basic types of coverage exist, which are determined by the type of policy a homeowner chooses.
The simplest form of home insurance is the “owner’s” policy. The term “owner” refers to the actual person who pays the premiums. The insurance policy usually only covers physical damage to the building and its contents. Most policies do not provide protection for damages to personal property like clothing, furnishings, or jewelry. Some also require the insured to purchase the insurance policy from the company offering it. Other types of insurance plans offer “comprehensive” coverage that provides protection from all risks on the property. Examples of comprehensive policies are property, life, health, and casualty insurance.
Property insurance covers the property and liability for any damages, theft, or loss to your home caused by an insured individual or organization. Life insurance is designed to protect a person or a business from the loss of life during its “normal” course of events. Both life insurance and property insurance are required to be approved by the Internal Revenue Service. Health and medical insurance is intended to replace lost wages or to help pay for medical expenses that may result from injury, illness, or disease. These policies typically pay for both short-term and long-term care costs. The most comprehensive form of insurance, “extended” home and auto insurance, combines coverage of home and auto as well as medical and life insurance in one policy.