Not every home insurance policy is the same. Some are focused on keeping costs down, while others are more concerned with having broad, specific protection. Often, a home insurance policy will be a balance between the two; cost and coverage. However, if you are the kind of homeowner who is more concerned with proper coverage than keeping costs down, then a “comprehensive” home insurance policy may be just what you want. This article will discuss, in detail, what a comprehensive home insurance policy is.
What Is “Comprehensive” Home Insurance?
A comprehensive home insurance policy is one that offers complete coverage on everything from the building structure, to your personal belongings, liability, and more. They usually even provide coverage in case of special circumstances like for living expenses if you’re ever misplaced.
Home Replacement Details
Not every comprehensive home insurance policy is the same either. When it comes to coverage details around replacing the home, there are usually two options; Guaranteed-Replacement or Straight Replacement Cost.
What is Guaranteed Replacement?
This is usually one of the most expensive options for home replacement, but for good reason because it provides coverage on replacing your house completely, no matter what the costs to do so are. The insurance replaces the home in full using the same or similar materials (some older homes might not be eligible). Your home gets replaced completely, even if the projected costs are higher than the maximum amount limit of the policy.
What is Straight Replacement Cost?
This option is cheaper than the ‘guaranteed replacement’ option, but it’s cheaper because there is a limit to how much the insurance can spend on replacing the home. If the cost to rebuild the home is higher than the maximum amount limit of the policy, the cost difference is the homeowner’s responsibility.
Comprehensive Liability Coverage
Comprehensive home insurance policies will also provide stronger coverage when it comes to personal liability concerns. That means, if any claims are filed against you regarding any incidents that occurred on your property. For example, if someone slips and falls on your sidewalk, or if your dog bites someone your liability coverage will kick in.
Living Expenses Coverage
Another aspect of comprehensive home insurance is the living expenses coverage that would cover the costs of living somewhere else if your home is damaged to the extent that makes it unlivable. If such a tragedy happens, the insurance would cover the costs of living in a hotel or rental unit until the home is fixed or replaced. It’s a great piece of coverage to have, but just don’t expect to be able to live in the most expensive hotels or rental options.
Policy Riders for Extra Coverage
Although comprehensive home insurance policies provide great coverage for the home structure, personal belongings, liability and living expenses, these types of policies usually don’t provide coverage from the risk of natural disasters like an earthquake or a flood. If any kinds of natural disasters are common in your region and you want coverage from these risks, activating a separate insurance policy or a policy rider is usually needed for this extra coverage.
Are You Considering Comprehensive House Insurance?
It’s important to note that we do not sell non-comprehensive policies other than when it’s required by a market (ie. a substandard risk). If you have any questions about comprehensive home insurance policies, we encourage you to contact us today. We’d happy to answer any questions you may have, and could offer you a free quote too!