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What Does Homeowners Insurance Cover?

By PolicyPals team, published on 5th December, 2020 

Homeowners insurance is an in-depth policy that covers your living space. Depending on the type of policy you have, many coverages are included.

In a standard single-family home, you would have the following coverages:

Dwelling

This covers the actual structure of your home. Think walls, flooring, foundations, and anything that basically cannot be removed from your home. This generally also includes appliances.

The dwelling amount is calculated by estimating the replacement cost of your house: this is the amount of money it would take to completely rebuild your home from the ground up in the event of a total loss. This is not market value, nor does it include land; it is the minimum cost to rebuild your home with similar materials to the original.

Other structures

Other structures are like dwelling in that it covers built-up objects on your property. This is calculated by replacement cost and usually covers things like fences, detached garages, patios, and other similar structures.

Personal property

This covers everything that is inside your home but not attached. Everything you own inside of the house, excluding appliances, is covered under personal property: beds, clothes, books, and all your belongings. It is generally calculated by using a percentage of your dwelling limit. 

A good rule of thumb is to photograph all of your belongings every few years, so if you were to have a loss, you could have a general idea of how much and what needed to be replaced.

Additional living & rental expenses

If you were to have a total loss, and your home was being rebuilt, or if your home were to become unfit for living, this part of your policy would come into play. This pays for you and your family to have temporary lodging in the case of a loss.

This is generally for a similar style of living situation. If you had a large farmhouse with eight people living inside, the policy would most likely cover a large apartment rather than a studio hotel room. This is frequently calculated as a function of the estimated replacement cost; the higher your estimated replacement cost, the more rental expenses you would be able to receive.

Medical expenses

This kicks in if someone gets injured on your property. Frequently, these are small amounts, and it is essential to take all necessary safety precautions with guests and visitors: negligence can negate this section of your policy. It is also crucial to note that you and those living with you are not covered under this section of the policy; it is only for others.

Personal liability

Like medical expenses, this covers you if someone else gets hurt on your property and sues you. Sometimes these lawsuits are not because of injury but rather damage to another person’s property. An excellent example of this would be if a tree in your yard fell on your neighbor’s house, and they sued you. The insurance will cover you up to the limit in legal fees.

For more information on how this works, talk to your agent!