coverage for the structure of your home
Your homeowners policy pays to repair or rebuild your home if it’s damaged or destroyed by fire, hurricane, hail, lightning, or other disasters listed on your policy. Most policies also cover separate structures, such as a garage, tool shed, or gazebo, typically for about 10 percent of the amount of insurance you have on the home’s structure.
A standard policy will not pay for damage caused by a flood, earthquake, or routine wear and tear.
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When buying coverage for the structure of your home, remember this simple guideline: Buy enough coverage to rebuild your home.
coverage for your personal belongings
Your furniture, clothing, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disasters. coverage is generally 50 to 70 percent of the insurance you have on the structure of the home.
The best way to determine if this is enough coverage is to take a home inventory.
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Personal belongings coverage includes items stored off-premises, meaning you’re covered anywhere in the world. Some companies limit the amount to 10 percent of the amount of insurance you have on your possessions. You also have up to $500 coverage for unauthorized use of your credit cards.
Expensive items like jewelry, furs, artwork, collectibles, and silverware are covered, but there are usually dollar limits if they are stolen. To insure these items for their full value, purchase a special personal property endorsement or float and insure the item for its official appraised value.
Trees, plants, and shrubs are also covered by standard homeowners insurance, typically for around $500 per item. trees and plants are not covered by disease or if they have not been properly maintained.
Personal liability covers you against claims for bodily injury or property damage caused by you or members of your family to others. it also pays for damage caused by your pets. so if your son, daughter (or even your dog) accidentally ruins a neighbor’s expensive rug, you’re covered. (However, if your carpet is destroyed, you’re out of luck.)
The liability portion of your policy pays both the cost of your defense in court and any court awards, up to the limit set forth in your policy documents.
Liability limits generally start at around $100,000; however, it’s a good idea to discuss whether you should purchase a higher level of protection with your insurance professional. If you have significant assets and want more coverage than is available in your homeowners policy, consider purchasing a comprehensive or excess liability policy, which provides broader coverage and higher liability limits.
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Your policy also provides no-fault medical coverage, so if a friend or neighbor is injured in your home, he or she can simply submit the medical bills to your insurance company. in this way, the expenses can be paid without a liability claim being filed against you. however, it does not pay for your own family’s or pet’s medical bills.
additional living expenses (ale)
ale pays the additional costs of living away from home if you are unable to live there due to damage caused by an insured disaster. covers hotel bills, restaurant meals, and other costs, in addition to your usual living expenses, incurred while your home is being rebuilt.
Please note that the beer coverage on your homeowners policy has limits, and some policies include a time limitation. however, these limits are independent of the amount available to rebuild or repair your home. Even if you run out of beer, your insurance company will still pay the full cost of rebuilding your home up to the policy limit.
If you rent out part of your home, ale also covers the rent it would have charged your tenant if your home hadn’t been destroyed.
next steps: buy a house? get the homebuyer insurance checklist.
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