What does homeowners insurance cover?

Think protection when you think about homeowners insurance. Home insurance is essential because most people can’t afford to rebuild and replace their entire home in the event of a natural disaster. Here are some things you need to know about homeowners insurance.

What is homeowners insurance?

Homeowners insurance can protect your home from damage to the property and personal belongings. Homeowners insurance can protect your home, your personal belongings and yourself. This package policy combines two types:

Insurance coverage for your property being damaged or destroyed by certain perils such as fire, theft, windstorm

Insurance coverage for liability exposure, such as someone getting hurt on your property

Homeowners insurance can help cover the costs of damage and loss caused by an unexpected event, such as a fire, burglary or other natural disaster. A home insurance policy can provide liability coverage for injuries that occur on your property, including bodily injury and property damage. It may also cover certain other accidents that may occur outside your property.

A home insurance policy can include a variety of coverage options. It’s important that you understand which coverage applies to which damages. Let’s dive into the details.

What is homeowners insurance?

Once you have a basic understanding of homeowners insurance, it is important to know what a standard policy covers. Homeowners insurance can help cover damages caused by perils such as

Fire
Hail
Lightning
Windstorm
Theft
Vandalism

Other hazards like earthquakes and floods are not usually covered by standard policies. However, additional coverage options are available.

What coverage are common policies?

Standard homeowners policies typically provide the following types coverages:

Coverage for dwellings

The dwelling coverage protects your structure, wall-to-wall carpet and built-in appliances from any damage. Your “dwelling” refers to the whole structure of your house, as well as any attached structures like a garage or cellar. This will cover any repairs or rebuilding costs if your home is damaged due to a covered loss.

Coverage for other structures

Additional structures coverage covers structures that aren’t attached to your home. Other structures insurance can help with the costs of damage to an unattached structure, such as a shed or garage, or guest house.

Protection for personal property

Personal property coverage covers your personal belongings, including furniture and electronics, in the event they are damaged by a covered loss.

Insurance coverage

Liability coverage can cover damages to property from bodily injury sustained by guests or other expenses resulting from negligence. This coverage could cover the individual’s medical expenses, income loss, and pain and suffering. In the event of a dispute, it could even cover your legal defense costs.

Loss of coverage

Loss of use insurance covers additional living and housing expenses in the event that your home is damaged or destroyed. Loss of use insurance covers the cost of temporary apartments or hotels if your home is being rebuilt or repaired following a covered accident.

Do homeowners need insurance?

Both yes and no. No, homeowners insurance is not required under state law. Your lender might require you to have a policy and certain levels of coverage for your home. Home insurance can help protect your home and possessions from the unexpected. It could also save you money on costly repairs.