How Home Insurance Works and When to Use it

How Does Home Insurance Work?Homeowners insurance is made up of coverage levels that may help pay to repair your home and replace your belongings if they are damaged by hazards, such as theft or fire. It could also help cover costs if you accidentally damage another person’s property, or if someone is injured at your home.
It’s important to understand what your policy actually covers. Standard policies include some causes of loss (such as wind damage, fires or theft) but not others (such as earthquakes and flooding). Save yourself the hassle and avoid filing a claim for an uncovered event.


When to Use Homeowners InsuranceYou Have Significant Damage or Total LossThis is primarily what homeowners insurance is most useful for — when your home suffers a loss so great after an unexpected incident that it becomes unlivable. In a situation like this, you should definitely file a claim to recover your losses.
The Cost of Repair Exceeds Your DeductibleIf part of your roof blows off and the estimate for repair is $5,000, when your deductible is $1,000, file a claim. If you incur an expensive repair or replacement to fix your home, and it was caused by a covered loss, you should use homeowners insurance to help pay for it.
You Haven’t Submitted a Claim in Three or More YearsInsurers take your claims history into account when they decide if they will cover you and what to charge for your premium. Statistically — whether for home or car insurance – if you’ve previously filed a claim, you’re more likely to file additional claims in the future, which makes you riskier to insure. When you do need to file claims, make sure to space them out as much as possible.


What Homeowners Insurance CoversCoverage for the Structure of Your Home

• Fire and smoke damage
• Hail and wind damage
• Lightning damage
• Damage to sheds, detached garage or fences

Coverage for Your Personal Belongings

• Furniture, electronics and clothing

Liability Coverage

• Legal expenses if sued
• A guest’s medical bills
• Damage you accidentally caused to someone else’s property
• Lost wages from an injured party

Additional Living Expenses (ALE) CoverageALE will cover the additional costs of relocating while your home is being rebuilt if your property is deemed unlivable from the damage of an insured disaster (i.e., hotel bills, restaurant meals and other costs beyond your usual living expenses).



What Homeowners Insurance Doesn’t CoverYour home insurance policy will not cover every possible disaster or mishap that can happen. If your neighborhood is hit by certain types of natural disasters and your home suffers structural damage, the loss will likely not be covered by your insurance carrier.


How to Get the Most Out of a Home Insurance ClaimReport Any Crime to the Police and Take Photos of DamageIf the damage was a result of theft or vandalism, report it to the local police immediately. Take photos of the damage, and make sure to get a copy of the police report for your insurer.
Contact Your Insurance Company and File a ClaimBefore formally filing a home insurance claim, ask your insurance agent the following questions:

• Am I covered?
• How long do I have to file a claim?
• Will my claim exceed my deductible?
• How long will it take to process my claim?
• Will I need to obtain estimates for repairs to structural damage?

Prepare a List of Damaged or Lost ItemsYou will need to substantiate your loss, so make a list of destroyed or damaged items and their estimated costs. Make a copy of the list for your adjuster when they come for an in-person visit.
Have an Adjuster Inspect the DamageYour insurance company will arrange for an adjuster to come and inspect your home in person. They will review the property damage to determine how much the insurance company should pay for the loss.
Make Temporary Repairs and Keep ReceiptsWithin reason, take the steps needed to make your home livable again. Save receipts to submit to your insurance company for reimbursement. If your property is unlivable, most policies provide coverage for additional living expenses, but you’ll need to provide proof of the costs.
Ask QuestionsDon’t be afraid to ask your USA Mutual Insurance agent or your state department of insurance any questions you may have along the way. Once the terms of your settlement are agreed upon, state laws require that your payment is promptly sent.