• Personal Property Protection
• Personal Liability Coverage
Vermont homeowners have invested a lot in the houses they own, and few could afford to lose their home in a disaster. That’s why there’s homeowners insurance.
Homeowners insurance helps protect houses and the contents inside them from many potential disasters. In addition to offering protection for a house and its contents, most policies also include liability protection for the policyholder themselves.
Most people who own a residence in Vermont need to have a homeowners policy for their house. This includes both “full-timers,” who live in the state year-round, and “part-timers,” who maintain a seasonal home in the state.
In many cases, homeowners are required by the terms of their mortgage to carry a homeowners policy. Banks frequently include such a requirement in the loans they underwrite to ensure that their investment in a home will be protected from disaster.
Many homeowners who aren’t obligated by a mortgage to carry a homeowners policy still choose to. Replacing a house is an expensive proposition, and few homeowners could afford to completely rebuild their residence if it was destroyed. Even those few who do have the financial resources necessary to rebuild a home normally don’t want to risk having such a large expense.
Most homeowners policies are written as “package policies,” which simply means they combined several individual coverages into a single policy. The exact individual coverages that a homeowners policy offers can vary, but there are three primary coverages that most policies offer as standard protections:
Dwelling Coverage, which typically insures a house itself
Personal Property Protection, which normally insures personal possessions (e.g. furniture, books, games, clothing, etc.)
Personal Liability Coverage, which typically offers liability protection for a range of potential incidents
In addition to these three coverages, there are many others that policies might offer as either standard or optional protections. Some other coverages homeowners might see in policies are:
Secondary Structures Coverage, which may provide protection for other structures on a property (e.g. a detached garage, fence, boathouse, gazebo, etc.)
Loss of Use Coverage, which may cover room and board expenses if the insured house is damaged or destroyed
Vacant Property Coverage, which may provide protection when a house is uninhabited for an extended amount of time
In general, home insurance policies don’t come with flood coverage. Homeowners who want coverage for potential flooding usually have to purchase a separate flood policy. Depending on where a homeowner lives, they may be able to get a policy through The National Flood Insurance Program or on the private marketplace.
Similarly, most home insurance policies also don’t cover earthquakes. In Vermont, homeowners who want coverage for potential earthquakes usually have to purchase a policy on the private marketplace.
There are several types of homeowners policies, but they can generally be categorized into open perils policies and named perils policies. The difference between the two categories is what perils, or potential incidents, are covered.
Open perils policies typically cover any peril that’s not specifically excluded in the policy. Unless a risk is mentioned in an open perils policy, it’s normally covered.
Named perils policies usually cover only those perils that are listed within the policy. If a peril isn’t mentioned in a named perils policy, it’s likely not covered.
In general, open perils policies usually offer more robust coverage than named perils policies do.
For help finding a homeowners insurance policy, Vermont homeowners should contact an independent agent in the state. An agent is qualified to help homeowners decide what coverages they want a policy to provide, and an independent agent can get quotes from several insurance companies for policies that will provide the desired coverages.