Homeowner’s insurance covers losses and damages to an individual’s residence, content, or assets of the residence as well as injuries and damages to residents of the building and third parties. Homeowners insurance isn’t a luxury; it’s a necessity that protects your home and possessions against damages.

Moreover, almost all mortgage companies require borrowers to have insurance coverage for the full or fair value of a property and won’t make a loan or finance a residential real estate transaction without proof of it.

What your homeowner’s insurance covers

When buying a homeowner’s insurance policy, many people only give consideration(s) to insuring the building to the neglect of other key components of the policy. Whilst insuring the building forms the basis of every homeowner’s insurance policy, the other aspects of the policy are also very essential. Your homeowner’s insurance policy can be extended to cover damages to the content of the building which includes everything from machinery, furniture, kitchen utensils among others.

Typically, damages caused to the building and/or the contents by fire, smoke, internal leakages, severe winds, and fallen items are covered by your homeowner’s insurance policy.

The policy can also provide coverage for personal and third-party injuries and liabilities that occur in your residence. Opting to cover these other aspects of the policy may come with a relatively higher premium but it is definitely worth it.

For instance, securing that extra cover for third party liabilities can save you money and even protect you from lawsuits filed by third parties who suffer injuries and/or damages in your residence.

What your homeowner’s insurance doesn’t cover.
Though the coverage of your homeowner’s insurance policy can be extended to cover damages to the content of your building, personal and third-party liabilities incurred in your residence, there are certain damages that your homeowner’s insurance policy doesn’t cover.
Properly understanding what is and isn’t covered by homeowners insurance requires policyholders to ask a lot of questions and to read the fine print on their insurance contract before they purchase a policy.

One typically damage that is usually not covered by a homeowner’s insurance policy is damage caused by natural disasters such as earthquakes and floods resulting from external conditions. If you live in certain regions that are high-risk for these or other types of natural hazards, you’ll want to be sure to inquire from your insurer whether the policy covers all these damages or not.
Also, damages or losses caused by radiations or nuclear waste, war, acts of terrorism, political revolts or coup d’état are also not covered by your homeowner’s insurance policy.
Moreover, there is a limit with regards to the amount of money that covers losses and damages incurred as a result of personal injuries and third-party liabilities.

Reading the policy document of your homeowner’s insurance policy may be a painstaking activity but it’s better to take the time to thoroughly understand what your insurance policy covers before getting caught up in an unfortunate situation and discover you’re not covered for that particular loss or liability.