Lenders, to protect their investment, often mandate that new homebuyers maintain basic homeowners insurance coverage as a minimal protection against damage posed by fire, lightning, hail, explosions, and an assortment of other disasters as part of their financing package. Like the limited liability coverage on your vehicle, however, these basic policies typically have a longer list of items not covered under the contract than those issues that are protected under its covenants.
For instance, rotting floors, sparking light fixtures, failing roofing systems, and malfunctioning appliances are just a few of the problems that only a comprehensive policy covers, so homeowners who believe their basic home insurance has them protected will be very disappointed.
Although comprehensive homeowners insurance carries a higher price tag, it also provides the highest level of protection against an array of disasters in addition to those listed above. From protection against liability claims in the event of a slip and fall accident to guarding against damage to freestanding structures like garages and sheds, comprehensive policies also cover:
- Loss and destruction to personal possessions
- Vandalism
- Water damage not caused by natural floods
As mentioned, this level of coverage does carry a higher price tag, so homeowners looking for peace of mind while managing their budget can choose a higher deductible to lower monthly premiums.