Basic Coverage In Homeowners Insurance Policies

Robin Wells

Homeowners insurance is critical for most people. Homeowners insurance offers a broad range of protection. Below are some forms of coverage to expect in your home insurance policy.

1. Dwelling

Dwelling coverage protects your main house plus other structures that attach to it. The coverage will repair or rebuild your home in case of damage. For example, the dwelling coverage can pay to repair a storm-damaged roof.

Your home insurance rates mostly depend on your dwelling coverage. Here are some factors determining the rates:

  • House size
  • Architectural design
  • House age
  • Construction materials

Ensure your dwelling coverage can rebuild your home in case of total damage.

2. Other Structures

Dwelling coverage excludes standalone structures, such as detached garages, stores, or fences. You need other structures coverage for such standalone structures.

Home insurance companies represent other structures coverage as a percentage of dwelling coverage. Thus, you need to increase your dwelling coverage to increase other structures coverage. The additional coverage might be necessary if your home has multiple or expensive standalone structures.

3. Personal Property

Personal property coverage covers damage or loss of your personal belongings. For example, the coverage may replace your television set, furniture, or clothing after a theft. Personal property coverage is also a percentage of your dwelling coverage.

However, insurance companies allow you to buy additional personal property coverage if you have expensive personal belongings. Some companies even allow you to purchase coverage for specific items, such as electronics.

4. ALE

Additional living expenses (ALE) help you pay for additional living arrangements if your house is inhabitable due to covered damage. Say a storm damages your home, and the contractor needs you to vacate the home for a week. You can use ALE coverage to fund an alternative residence, such as a hotel.

ALE coverage's limit is also a percentage of dwelling coverage. The coverage only applies to additional expenses that the relocation occasions. For example, ALE typically covers food costs for those who usually cook at home but cannot do so during repairs.

5. Liability

Liability coverage shields you from liability claims if you cause property damage or bodily injury to others who are not members of your household. For example, the coverage will compensate the neighbor if your child accidentally damages their fence. The coverage will also settle medical bills for a guest who slips and falls on your torn rug.

Talk to an insurance agent to help you evaluate your coverage needs. That way, you can customize your homeowners insurance policy for the best protection.