A homeowner insurance policy is a packaged policy designed to cover homes against disaster and damages such as floods, earthquakes, fire, theft and vandalism. It also covers the owner of the policy, family members and, in some cases, pets.

Are all natural disasters covered under a homeowner insurance policy?

No, damages caused by earthquakes and floods are not covered under the standard homeowner insurance policy. You need to purchase separate policies to obtain coverage against these disasters.

What areas are covered by the homeowner insurance policies?

Homeowner insurance policies basically cover four major areas: structure of the house, personal belongings, liability protection and additional expenses.

Structure of home: The policy covers all damages caused to the building due to natural disasters such as fire, storm, lightening etc. The standard policy will however, not cover damages caused by earthquakes and floods.

Personal Belongings: The policy covers any damages caused to your personal belongings such as furniture, clothes, sports equipment, paintings, etc. Moreover, it covers off-premises belongings located in other parts of the world. This may include jewelry put away in a bank locker, etc.

Liability protection: This policy covers you or your family members against lawsuits that may result if you, your family members or pet is held responsible for accidentally causing bodily injury or property damage to another person.

Additional Expenses: These refer to the expenses you may incur if you are temporarily unable to stay in your house for some period of time due to some disaster such as fire.

How can I reduce the premiums for my homeowner insurance policy?

Your insurance agent can tell you about steps you can take to bring down the premiums of your policy. The best way is to make your home more resistant to disasters.