Getting What You Paid For: Standard California Home Insurance Coverage

A person can legally buy a house in America without having to be burdened by mandatory insurance. However, majority of homes nowadays are bought with a mortgage. Lenders require homeowners to get home insurance in order for them to be able to protect their investment in case of unforeseen events and circumstances that may cause damages to the property. With the additional expenses and the inevitable and constant increase of the cost of living, people are struggling more than ever to make ends meet. In California, as well as in other states, it is important to stress the significance of continuing on saving money and at the same time finding great coverage on one’s homeowners insurance.

When it comes to level of coverage, a person has three options regardless of whether one is an owner or a renter. The first option is Actual Cash Value. It is a type of policy that pays to replace the home or possessions while subtracting the cost of depreciation. Second is Replacement Cost and it pays for the replacement of house or possessions without deduction of depreciation. The third is Guaranteed or Extended Replacement Cost. This policy offers the highest level of protection. It pays for all expenses needed to rebuild one’s home to its state before the disaster.

The California Home Insurance coverage is divided into Section I: Property Coverage and Section II: Liability Coverage. Property Coverage includes Dwelling, Other Structures, Contents/personal Property, and Loss of Use, while Liability Coverage comprises of Personal Liability Protection and Medical Payments.

(A)Dwelling provides coverage to protect the house and attached structures if damaged by a covered peril; (B) Other Structures is for protection of other unattached structures on the house premises; (C) Contents/Personal Property is for the contents of the home, as well as other personal belongings of the family and is limited to certain types of property that are susceptible to loss; (D) Loss of Use is a coverage that helps with alternative accommodations if the home is damage by a covered peril to a point that one cannot live in it anymore; (E) Personal Liability offers financial protection during a lawsuit for when the resident of a household is legally responsible for injury to others and; (F) Medical Payments to Others is for the reimbursement of medical expenses of unrelated persons injured accidentally on one’s property when a lawsuit is not involved.

It is important to take note that perils such as earthquakes, flood, mold, earth movement, and "wear and tear’ are usually excluded from the said coverage. One may opt to buy specialized homeowners insurance that provide additional protection beyond the standard coverage limitations.

Prevention is key when protecting valuable assets such as the home. Knowledge of the home insurance coverage will allow homeowners to better determine whether or not they are still getting their money’s worth and at the same time the coverage needed for the home and family.

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