If you have recently purchased a home and need to buy home insurance, then you may be unfamiliar with the way the insurance works and what it covers. This is confusing to some, and it may leave you without the coverage you need. In some cases, you also may not be filing home insurance claims when it is appropriate. If you want to know about some of the more confusing aspects about home insurance, then keep reading.

Water Damage May Be Covered

Water damage in the home is common, and there are more than a few different causes of the damage. Burst water pipes, the collection of water in your basement, faulty plumbing systems, leaking HVAC units, floods, hurricanes, and severe rain storms may all be the reason why a home develops water damage. Some of these specific causes of water damage in your house are covered by insurance, while others are not.

Flooding caused by natural disasters like hurricanes, overflowed rivers, and heavy rainfalls are not usually covered by home insurance. This is especially true if you already live in an area that is prone to flooding. In this case, you will need a separate flood insurance policy. These policies typically cost about $700 a year, and your mortgage company may require you to purchase a policy if you live in a flood prone area. 

If you do not live in a flood prone area, then your basic home insurance policy may cover water damage that is likely to happen in your home. For example, a traditional policy will cover damages from burst water pipes, sump pump failures, roof leaks, and backed up sewage systems. However, your policy may not cover damages that occur from a faulty repair. If a previously repaired pipe bursts in your home a few weeks after the repair, then the plumbing repair specialist will be responsible for damages. The plumber's insurance company will need to pay for damages instead of your insurance carrier. Basically, if the damage would not have occurred if repairs were made properly, then the contractor or professional is responsible.

Home Belongings Are Covered

If you have home insurance, then it is very likely that your policy includes personal property protection. This protection covers any damages or thefts to the personal property inside your home. There are two different types of coverage that may be offered by your insurance company. These include replacement and cash value coverage. Replacement coverage reimburses you for the cost to replace lost and stolen items, while cash value coverage provides you with the monetary value of the item at the time the damage occurred.

When you choose a home insurance policy, you should consider your belongings as well as the value of your things when picking between a replacement or cash value policy. While the types of coverage are similar, cash value policies take depreciation into account. For example, if your 10 year old laptop is stolen, you may receive very little cash for the item since it has lost value over time.

If you have personal property protection, then you should know that all items are covered by the home insurance policy when your belongings leave your home. This means that your laptop computer is covered by the insurance if it is stolen from your car or your friend's house. It also protects the computer if your airline loses it when you travel.

Since home insurance provides a blanket protection policy for belongings regardless or where they are broken or stolen, it is wise to complete a home inventory. This inventory is a descriptive list of all the items in your house that includes the value of each item. This list does not need to be provided to your insurance company. However, it should be kept in a safe place so it can easily be referenced when an item needs to be replaced.