When buying a home, your lender requires that you have home insurance. Even after your mortgage is paid off, home insurance is a good thing to have. But what exactly does a home insurance policy cover?
There are several different types of home insurance policies, but here is what most cover:
- Dwelling – Provides protection for the structure of your home and other structures attached to it. The basic home insurance policy pays to repair or rebuild your home if it is damaged due to fire or severe storms.
- Other Structures – Provides protection for structures or dwellings on your property not attached to your residence. This may include unattached garages, sheds, fencing, etc.
- Unscheduled Personal Property – Covers damage to your personal effects – those things owned or used by you inside or outside your home. Personal items such as furniture, clothing, computers and entertainment units are covered, even if the device is not in the home when the device is damaged. You can buy additional coverage for valuables such as furs, jewelry and art, if their value exceeds the limit specified by your policy.
- Loss of Use – Reimburses you for expenses such as hotel stays and meals you may incur if your home becomes uninhabitable due to a loss covered by the insurance policy.
- Personal Liability – If you are sued because a member of your family hurts others or damages their property, your insurance pays for that liability up to the limit specified by your policy.
- Medical Payments – Provides coverage for medical payments, if a third party is injured by or on your personal property.
Most home insurance policies offer basic coverage from common hazards. Because the basic policies are built with the average American home in mind, your policy might not account for all risks associated with your location or unique possessions. Be sure to talk with an insurance specialist to determine the type of coverage you need.
Types of home insurance policies
Unscheduled Personal Property
Loss of Use