Basic parts of a homeowners insurance policy

A homeowners policy is made up of several distinct coverages — some that are included automatically and others that you can choose to add.

Standard coverage

  • Dwelling protection: Covers damage to the home and attached structures, such as a garage.
  • Other structures protection: Covers stand-alone structures on your property, such as a fence, carport or toolshed.
  • Additional living expenses coverage: Also called “loss of use,” this helps pay for temporary relocation and basic living expenses such as meals if a covered loss forces you to vacate your home during repairs.
  • Personal property coverage: Pays to repair or replace belongings that are stolen or damaged in a covered loss — everything from your furniture to your curtains to your dishes.
  • Liability coverage: Pays out if you’re found responsible for others’ injuries on your property or away from home.
  • Medical payments coverage: Covers injury treatment costs for guests who get hurt on your property, or individuals you or your family members accidentally injure while away from home. This coverage kicks in regardless of who’s at fault.

Common optional coverages

  • Water backup coverage: Covers damage caused by a burst pipe or other issues related to your abode’s plumbing. Note that this coverage does not cover flash floods, only water that comes from the ground up. Depending on the insurer, this coverage may be included automatically.
  • Enhanced dwelling protection: Most insurers offer extra coverage for your house’s structure. In case your original coverage limits aren’t enough or there is a spike in the cost of construction, having enhanced dwelling coverage helps ensure you don’t have to dip into your savings to rebuild your home.
  • Identity theft expense coverage: Helps reimburse you for expenses you incur while recovering from identity theft. Depending on the insurer, this coverage may also include help from an identity theft advisor, who can deal with creditors and bill collectors and possibly restore your credit.
  • Scheduled personal property endorsement: Covers high-end items that exceed your regular personal property limits, such as jewelry or fine art.

This is only scratching the surface. Your insurance agent can tell you about other coverage types available that match your circumstances.

Next-Choosing your coverage limits and deductibles

Posted 2:00 PM

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