Understanding Homeowners Insurance

Understanding Homeowners Insurance

A standard homeowners insurance policy covers the structural components of your home and most of the contents within it. Most types of damage to your home from natural disasters are covered, but there are notable exceptions such as damage caused by floods, earthquakes and the owner’s failure to perform routine maintenance on the home. As a rule, homeowners insurance policies do not provide coverage for damage caused by floods and earthquakes; separate policies are available for those coverage’s. Maintenance-related problems such as damage caused by failure to fix a leaky roof or normal wear and tear are part of routine home maintenance and are the homeowner’s responsibility under most homeowners policies.

What a Homeowner’s Insurance Policy Covers

It’s important to remember that each homeowners insurance policy varies somewhat on what it covers, depending on the company that issues the policy and the preferences of the individual homeowner(s). The following types of coverage are usually included:

  • Building Structure(s) – This portion of your policy covers repairs or replacement of your home for damages or total loss resulting from fire, lightning, hail, strong winds, etc. Coverage for floods, earthquakes and normal wear and tear are not included
  • Personal possessions – Most homeowners insurance policies cover personal possessions such as furniture, clothing, electronics, appliances, etc., for up to 40 to 70 percent of the amount of insurance coverage you have on the home. For example, if you have $350,000 worth of insurance coverage on the home, you could expect $140,000 to $245,000 worth of coverage for personal possessions
  • Additional living expenses if your home is damaged and you need to live elsewhere for a while – If a fire, storm, or other type of insured disaster prevents you from living in your home for a while, this coverage pays for hotel rooms, restaurant meals, and other expenses while your home is repaired or rebuilt
  • Liability protection – This portion of your coverage covers lawsuits that may arise from bodily injury or property damage caused to other people or their possessions by you, a family member or your pets

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