What does homeowners insurance cover?
It is essential to know what your policy covers before anything happens. This will help avoid any disputes with the insurance company later on.
Most standard forms of homeowners insurance in peoria az protect against direct damage caused by perils listed in the policy. There are two primary types of coverage: property and liability. Coverage for these types of loss varies somewhat between policies, so you must carefully review your specific policy terms before taking out an approach or making changes to an existing one.
Property Coverages – The two most common forms of property insurance are basic coverage and replacement cost coverage, which replaces lost or damaged items at current market value rather than what you originally paid for them — called ACV (adjusted-for-inflation value). Basic coverage is more affordable, but it only pays the actual cash value of lost or damaged property.
Replacement cost coverage can be more expensive. Some people choose to forgo this type of coverage because they don’t want to pay higher premiums or meet a high deductible before receiving compensation. However, replacement cost policies typically offer significant benefits in terms of peace of mind since you won’t have to make an item-by-item list when filing a claim. Under this type of policy, your home is insured based on its market value, which means that your insurer will buy you a new house with modern amenities instead of replacing all the vintage fixtures in your old abode. It also means that you won’t have to worry about depreciation, which can be a significant factor when calculating the actual cash value of a damaged or destroyed item.
Liability Coverages – Liability insurance covers you if someone is injured on your property or if you are held liable for damage or destruction caused by something you did or didn’t do. This type of coverage can help protect your finances if you are sued and found liable for damages. It can also help cover the costs of legal defense fees up to the policy limit.
There are two types of liability coverage: personal liability and property damage. Private liability insurance protects you if someone is injured on your property and sues you for damages. Property damage insurance protects you if you are held liable for damage or destruction to someone else’s property. Keep in mind that depending on the type of coverage, your insurer may pay for damage or destruction up to either the actual cash value (ACV) or replacement cost after depreciation.
Insurance companies use fault to determine which party pays in the event of an accident. Responsibility can be determined by who was negligent when an accident occurred.