Four Basic Coverages

What is Covered Under Home Insurance?

Homeowners insurance offers economic security from disaster, vandalism, and incidents. Most basic policies provide four primary forms of coverage:

1. coverage of your home structure;
2. coverage of your personal belongings;
3. coverage of extra living expenses;
4. coverage for liability

Coverage for your home structure

Your homeowner's insurance pays to fix or restore your house if it is damaged or destroyed by your policy's fire, earthquake, hail, lightning, or other disasters. Most plans also cover detached buildings such as a barn, tool shed, or gazebo — generally about 10% of the insurance you have on the house structure.

A standard policy would not pay for flood damage, earthquake, or regular wear and tear. When buying your home structure policy, note this basic guideline: buy enough policy to restore your home.

Coverage for personal belongings

Your furniture, clothing, sports equipment, and other personal belongings are protected if fire, hurricane, or other insured disasters are stolen or destroyed. The policy is usually 50-70% of the insurance you have on the house framework.

Be sure to assess whether personal property insurance limits are adequate. Personal property coverage covers products kept off-premises. This covers your personal property anywhere in the world. Some firms limit the insurance amount to 10 percent of your belongings. You will have up to $500 coverage for improper credit card use.

Expensive items like jewelry, furs, paintings, collectibles, and silverware are protected, but dollar caps typically remain when stolen. To make sure these items reach their full value, buy or float a special personal property endorsement and ensure the object for its valued value.

Trees and shrubs are also protected by standard homeowner's insurance — usually around $500 per item. Trees and plants aren't covered for disease, or if poorly treated.

Personal liability

You are responsible for personal harm or property damage that you or family members cause to others. It also pays for your pets' injuries. So, if your son, daughter (or even your dog) unintentionally damages a costly neighbor's rug, you're safe. (Yet if they ruin your carpet, you're lucky.)

Your policy's liability component accounts for both the expense of defending you in court and any court awards — up to the cap specified in your policy documents.

However, it is a good idea to examine whether you can buy a higher standard of cover with your insurance professional. If you have substantial assets and want more coverage than provided under your homeowner's policy, consider purchasing a policy that offers a broader range and higher liability limits.

Your policy also offers no-fault medical coverage because if a friend or a neighbor is injured at home. Your insurance provider will quickly request medical bills. This way, costs can be charged without lodging a lawsuit against you. However, it doesn't cover your own family or pet medical bills.

Additional living expenses (ALE)

ALE covers the extra expense of living away from home if you can't live there due to an insured tragedy.It covers hotel bills, restaurant meals, and other costs,beyond your ordinary living expenses incurred when restoring your house.

Bear in mind that your homeowner's policy's ALE coverage has limits — and specific policies have a time limit. These limits, however, are different from the amount available to restore or fix your house. And if you use your ALE, the insurance provider is always covering the entire cost of repairing the home to the policy cap.If you rent part of your building, ALE would also cover you forthe rent you'd receive from your roommate if your home hadn't been lost.