Homeowners Insurance Coverage
Most homeowner’s insurance policies have very limited coverage. For other types of coverage, a homeowner needs to purchase additional types of insurance. Typically, claims due to disasters such as earthquakes, floods, war, and other “Acts of God” are not included in a typical homeowner’s insurance policy. For these types of disasters, special insurance can be purchased in order to be covered, including flood insurance and earthquake insurance.
The basic insurance policy generally has coverage that reimburses you for the cost to rebuild or repair your home if destroyed or damaged through no fault of your own. The items inside the home are also part of the coverage included in basic homeowner’s insurance. If your home is burglarized and your property is stolen, your insurance policy usually reimburses you for the value of the lost items.
Most of the homeowner’s insurance policies are long-term contracts for a fixed period of time. If you do not wish to get into a long-term contract with an insurance company, you have the option of purchasing what is known as a perpetual insurance.
Perpetual insurance is a type of homeowner’s insurance without a fixed term. These types of policies are short term and must be renewed on a monthly or bimonthly basis. Perpetual insurance policies are not offered in all areas; they can only be found in certain areas.
The amount of premium you must pay for your policy is calculated depending on the type of coverage you wish you have for your home, as well as the likelihood of damage or destruction to your home. If it appears that it is unlikely that your home will be damaged, or if you live in a neighborhood that has very low crime rate, your premium will be significantly lower than homes that are situated in flood zones and high crime areas.
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