Homeowners insurance provides protection for your home and belongings. It covers damages and losses from certain events and perils. This guide examines what standard homeowners insurance includes and key add-ons to consider.
Overview of Homeowners Insurance Coverage
Homeowners insurance is a package policy that combines property damage coverage and personal liability coverage. Here is an overview of what’s typically included:
Property Damage Coverage
Covers your dwelling and other structures on the property. Includes:
- Main house structure
- Garages, sheds, fences
- Permanent outdoor fixtures like decks
Also covers personal belongings inside the home like furniture, clothes, and electronics.
Personal Liability Coverage
Covers injuries that happen to other people on your property. Includes legal defense costs.
Additional Living Expenses
Covers extra costs if you can’t live in your home due to damage. For temporary housing, restaurant meals, storage, etc.
Key Homeowners Policy Perils
Homeowners insurance covers losses from specific events called perils. Standard perils include:
- Fire or lightning
- Windstorm or hail
- Vandalism or malicious mischief
- Volcanic eruption
- Vehicle or aircraft damage
- Falling objects
- Weight of ice, snow, or sleet
Exclusions and Limitations
Not everything is covered. Standard exclusions include:
- Sewer backup
- Normal wear and tear
- Mechanical breakdowns
- Damage from insects or rodents
Most policies limit certain categories like jewelry, cash, computer equipment, etc. Review limits carefully.
Add-On Coverage Options
Extra riders from your insurer can expand protection. Consider adding:
- Flood insurance – Covers flood damage from natural causes like heavy rain. Required in high-risk flood zones.
- Earthquake insurance – Covers earthquake damage which is excluded from standard policies.
- Replacement cost coverage for possessions – Pays the full cost to replace belongings without depreciation deductions.
- Jewelry, cash, or valuables riders – Increases limits for these categories.
- Water backup coverage – Covers damage from water backups through sewers, drains, or sumps.
- Home business insurance – Provides liability and property coverage for home-based businesses.
Tips for Getting the Right Homeowners Coverage
- Review your policy annually and when life changes like marriage or new additions to the home.
- Insure your home for 100% of rebuilding cost, not market value.
- Create a home inventory to establish value of possessions. Update annually.
- Understand exclusions like flood and earthquake. Add separate riders if needed.
- Pick a deductible you can afford out of pocket if you file a claim. Higher deductibles mean lower premiums.
- Ask about any discounts like security systems, new roofs, multi-policy bundling etc.
With the right homeowners insurance coverage, you can protect your property and belongings from unforeseen losses. Work with a trusted insurance agent or broker to make sure you have the coverage your situation requires.