What Exactly Does Homeowners Insurance Cover?

Homeowners insurance is a must-have for property owners. Read on to learn more about what homeowners insurance covers.

Damage to Your Home

The primary benefit of homeowners insurance is protection for the physical structure of your home and its contents. Your homeowners policy will have a list of events that cause damage for which your home is covered. These generally include fire, hurricanes, lightning, and vandalism. Floods, earthquakes, and poor home maintenance are not covered. For those and other events that are not covered, you will need to add a separate insurance rider to protect your home if one of those events occurs. 

Not only is your home protected by this insurance, but your garage, shed, and any other structures on your property are also covered. In addition, homeowners insurance can cover the contents of your home, including your clothing, furniture, and appliances, if they are destroyed or damaged thanks to a covered event. If you feel the need, you can also add “off-premises” coverage. This means that no matter where you are when you lose a prized possession, you will be reimbursed for the value of that item, up to a limit. Most limits are capped at 70% of the value your home is insured for.

Personal Liability

Homeowners insurance gives you personal liability coverage, which protects you if someone files a lawsuit against you for an event that you or a family member caused, on or off your property. That means if your pet causes an injury or you break a valuable item, you can file a claim to reimburse the injured party for the damages. Insurance experts recommend carrying $300,000 or more in personal liability coverage.

Additional Living Expenses

Say your home is damaged by a covered event. Sometimes, that means it becomes uninhabitable for a short period of time. When you get additional living expenses coverage through your homeowners insurance, you will be protected in case that happens. Your insurance will reimburse you for the rent, hotel room, restaurant meals, and more until you can move back into your home. This is not a blank check, however. Your policy will have a daily and total limit for coverage.

Replacement or Actual Value

Your homeowners insurance is not necessarily going to pay you the cash value for your home if it gets damaged. The actual cash value would be the cost of the house plus the value your belongings are currently worth. Some policies will give you the replacement cost, which is the actual cash value of your home plus the value of your possessions without deducting for depreciation. If you want, you could even choose a guaranteed or extended replacement cost for your home, which would give you the money to rebuild your home, even if it is up to 20% or 25% more costly than your policy limit.

Do you want to learn more about what homeowners insurance can do for you? Insured For Life can help. Give us a call today.