Four Types Of Homeowner's Insurance

Homeowner's insurance is an essential part of owning a property, as it can help save you from financial disaster in the event that your home or belongings become damaged because of some outside influence. There are different types of coverage available under homeowner's insurance plans, each of which addresses a different potential source of damage. Understanding the differences between the four most common types of homeowner's insurance policies can help you choose the ones that best fit your needs.

Dwelling Insurance

Dwelling insurance, as its name would indicate, is a type of homeowner's insurance that is designed to financially reimburse you for any damage that your home's structure sustains. Different types of policies will cover different types of damages, but common examples of coverage include fire damage, water damage from burst pipes (not flooding), vandalism, hail and wind damage, and so on.

Natural Disaster Insurance

Natural disaster insurance is similar to dwelling insurance in that it will provide you with financial protections for damage to your property so long as they are caused by things like flooding, hurricanes, tornadoes and so on. However, natural disaster insurance will likely also cover any damages that your personal belongings suffer as a result. Normally, specific types of natural disaster coverage will have to be purchased, and not all types of insurance are offered or well suited for your climate: for example, there is little reason to purchase tornado insurance in Hawaii, but hurricane, flooding and volcano insurance are all applicable.

Liability Insurance

Liability insurance is a type of insurance that is designed to protect you against the financial damages and court and legal costs associated with someone becoming injured while on your property. Liability insurance policies can also protect you against financial damages if you accidentally damage your neighbor's property – such as landscaping design causing flooding in their basement, or something in a similar vein.

Personal Possessions Insurance

The last type of homeowner's insurance that should be noted is personal possessions coverage. This type of insurance will protect all of your items within your home from damage or theft (though not from damage related to natural disasters). Most personal possessions insurance will insure your possessions up to a certain value, making it ideal for mid-level items like TVs, furniture and computers. However, if you have specific items, like antiques, which are extremely valuable, it may be worth purchasing a specific insurance policy for those items separate from your homeowner's insurance policy to ensure that their full value is protected.