What is Included in a Standard Homeowners Insurance Policy?

29
March 2017
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The biggest investment most people will ever make is purchasing a home.

When you protect your home with homeowners insurance, you’re doing more than safeguarding your financial investment; you’re protecting the place where you keep your favorite belongings, where you make memories, and where you keep your family safe and sound. Here’s how a standard homeowners policy works hard to keep the people and things you love protected.

What’s Covered by Standard Homeowners Insurance?

Most standard homeowners insurance policies include four types of essential coverage:

  1. Coverage for the structure of your home
  2. Coverage for your personal belongings
  3. Liability protection
  4. Additional living expenses in case you are temporarily unable to live in your home due to an insured disaster

Let’s explore each of these essential coverage types.

Coverage for the Structure of Your Home

If your home was damaged or destroyed by a fire, lightning, windstorm, hail, a vehicle, or any other covered disaster, this coverage will pay to help you repair or rebuild the house itself.

Many policies also cover other detached structures on your property, such as garages or tool sheds, as well.

Not all damage to your home is covered by a standard homeowners policy, however. Damage caused by flood, earthquake, neglect, or simply normal wear and tear are generally excluded.

Coverage for Your Personal Belongings

When a fire breaks out in your kitchen and the smoke damages or destroys the furniture, clothing, and window treatments throughout the entire home, personal belonging coverage will typically help you replace or repair the damaged items.

Your personal belonging protection includes your furniture, sporting equipment, clothing, electronics, and other personal items. It can even include coverage for trees and shrubs due to fire, lightning, explosion, theft, aircraft, vehicles not owned by the resident, vandalism and malicious mischief.

This coverage typically extends to your personal belongings stored off-premise, as well.

While more costly items such as furs, collectibles, art, silverware and jewelry are generally covered under a standard policy, there may be a dollar limit if they are stolen. However, personal property endorsements may help you fill in the coverage gap for your more valuable belongings.

Liability Protection Coverage

Homeowners insurance doesn’t just protect your home and belongings against damage, theft, vandalism, or destruction. It also covers you against most lawsuits for bodily injury or property damage, as well.

If one of your kid’s friends is running through your backyard and trips and falls, this liability coverage can help cover the medical costs for the resulting injuries. And if a lawsuit were to arise because of the incident, your homeowners liability coverage can help pay for the costs of defending yourself in court, plus any awards or settlements (up to the limit of your policy).

Coverage for Additional Living Expenses

What happens if your home is destroyed by a covered peril but you can’t live there until it’s been rebuilt or repaired? Additional living expenses coverage will pay for hotel bills, restaurant meals, and other expenses above and beyond your normal living expenses if you are temporarily unable to live in your home because of an insured disaster.

Additional living expenses coverage can even cover rent from tenants if you rent out part of your home.

If you need to use coverage for additional living expenses while your home is being rebuilt after an incident, there’s no need to worry about it depleting your repair funds, either. This coverage has a limit separate from the amount available to repair or rebuild your home.

While a standard homeowners policy doesn’t offer coverage against every risk your home might face, it can provide a stable foundation of protection against many of the risks that could damage or destroy your home and belongings. You can’t always know when a disaster may strike and threaten your biggest financial investment, but with homeowners protection, you can rest easy knowing you’re covered against things like fire, theft, vandalism, liability lawsuits, and more.

 

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