Types of Homeowners Insurance Coverage – What the Typical Policy Covers

Your home is probably the most important investment you own. It is a dream come true, a constant reminder of the effort and determination that goes into the achievement of a big goal. Now, what happens next? Protecting your property and maybe keeping it for the rest of your life.

If you own your home free and clear, there is no requirement to have home insurance on it. But if you have not bought a policy for your property, you should; you never know when calamity comes calling. You want to have protection all the time. Before you buy coverage, here are a few things you should understand:

Types of Homeowners Insurance Coverage

There are various types of home insurance coverage you can buy to secure your property. These are :

1. Dwelling Coverage

You have probably, as a homeowner, asked yourself this question: what is dwelling insurance? Do I need it?

Dwelling coverage is an integral part of your standard homeowner’s policy. It covers your home’s structure. Additionally, this coverage protects you from specific perils that can cause damage to your property. The coverage does not include structures not directly attached to your home, for example, a separate guest house. Other parts of your homeowner’s policy may still cover such standalone structures.

Standard dwelling insurance covers many of the same perils your homeowner’s policy covers. Examples of these risks are:

  • Smoke
  • Theft
  • Wind
  • Sleet
  • Hail
  • Vandalism
  • Falling objects
  • Explosions
  • Fire
  • Lightning

If fire damages your home, dwelling insurance covers the cost of either repairing or rebuilding it. Review your dwelling coverage with your agent to understand what it does or does not include.

2. Personal Property Coverage

Personal property includes all the things you own such as electronics, jewelry, clothing, collections, and furniture among other contents. The coverage protects your belongings in the event of a covered loss such as fire or vandalism.

3. Liability Coverage

It is also known as personal liability coverage. It is a component of renters insurance and all types of homeowners insurance policies. Personal liability insurance covers the cost of damages you and other people covered by your policy are responsible for causing.

It also covers the legal costs involved when a party injured on your property sues you. Additionally, it pays the defendant where a court rules in their favor. The limit for personal liability coverage usually is $ 100,000. Review your home insurance with your agent to see if you would like to increase your policy limits.

4. Loss of Use Coverage

You need to check whether your homeowner’s policy includes loss of use coverage. You may want to have it added if it is not. If a disaster damages your home, for example, you may have to look for alternative accommodation. Loss of use coverage pays for any additional living expenses you may incur as your home gets repaired.

When it comes to insurance, you need to have the right information. A trusted and competent insurance agent can accurately explain every detail of your policy. Your goal is to have an adequate amount of proper coverage.