Understanding Homeowners Insurance Policy Elements

For a first-time home buyer, there can be a lot of new information and concepts to learn and comprehend. Some of these can be difficult to understand at times. Homeowner's insurance is something that everyone purchasing their first condo, townhome, or house should be familiar with. There are several different types of insurance available, each with a different amount of coverage.

The most basic parts of any homeowner's insurance policy will provide coverage for the construction of the property itself, any personal belongings contained within the home, and the expense of relocating should the owner be forced to leave their home. This is referred to as hazard insurance coverage in some circles. A homeowner's insurance policy may cover the cost of medical treatment for someone who is wounded on their property. These policies also offer some protection against the obligation associated with other assets.

A named-peril policy is one type of hazard insurance coverage, whereas an open-peril policy is another. The first type of policy, known as an HO-2 policy, provides coverage for a smaller subset of occurrences than the second type of policy, known as an HO-3 policy, which provides coverage for a larger subset of events. In the latter case, all types of events would be covered, except for those specifically listed as exclusions by the insurance company.

Insurance Policies Cover A Variety of Situations

Damage caused by overflowing water, theft, vehicle damage, fire, smoke, and falling objects are just a few of the common occurrences that are covered. People who live in places where earthquakes or floods are a regular hazard may wish to consider acquiring insurance policies that cover damage caused by these natural disasters. Individuals who own high-value possessions such as fine art or jewelry may wish to look into supplemental insurance policies tailored specifically to their needs.