Updated: October 2017
Homeowners insurance policies are not one-size-fits-all. While a typical policy comes with certain coverages, it's usually customized to meet each individual homeowner's unique needs.
Homeowners insurance is made up of coverages that may help pay to repair or replace your home and belongings if they are damaged by certain perils, such as fire or theft. It may also help cover costs if you accidentally damage another person's property or if a visitor is injured at your home.
Dwelling Protection
One of the basic coverages of a homeowners insurance policy is
dwelling protection, which helps cover the structure of the home in which you live, as well as other structures that are attached to it, such as a garage or a deck,
against certain risks.
Other Structures Protection
Most homeowners insurance policies also include coverage for
other structures that are on your property but separate from your home, like a detached garage, tool shed or fence.
Personal Property Protection
Homeowners insurance doesn't just help cover damage to your home. It may also provide
coverage for the personal belongings you keep within it. Suppose your electronics are stolen from your home or your furniture is damaged by a fire. Personal property protection may help pay to repair or replace your belongings if they are damaged or destroyed by a covered risk.
Many insurers offer
optional coverages that may further help protect the stuff you own. For instance, you may be able to purchase
extended coverage for items such as jewelry, watches and furs that have values above your personal property coverage limits.
Liability Protection
A typical homeowners insurance policy provides liability coverage when someone not living with you is injured while on your property. Suppose a visitor trips over your broken porch step. Bodily injury liability coverage may help pay for your resulting legal expenses or the visitor's associated medical bills if you are found at fault.
You may be able to increase your
liability coverage limits by adding a
personal umbrella policy. Your agent can explain what options are available to you.
Coverage Limits and Deductibles
Keep in mind that each coverage in a homeowners insurance policy is subject to a limit — the maximum amount your policy would pay toward a covered loss. You may be able to adjust your coverage limits to your needs — taking into account, for example, the value of your home and belongings and how much it may cost to repair or replace them if they are damaged or destroyed by a covered risk.
In most cases, you will typically have to pay your deductible before your insurance benefits kick in to help cover a loss. Read your policy or contact your agent to review your coverage limits and deductibles. You can typically adjust them to fit your needs.
The protections offered by a homeowners insurance policy may serve as a safety net if the unexpected occurs. A local agent can help you select the coverages and limits that make sense for you.
