A standard homeowners policy offers coverage for four major areas: your house’s physical structure, your personal belongings, liability (financial protection) for you as a homeowner, and expenses in the event that you are unable to live in your home following damage or theft. 

Your home’s physical structure.  A standard homeowners policy will insure you for the cost of rebuilding your home in the event of most accidents and disasters (with the notable exception of floods and earthquakes).  You can also get insurance for other detached structures (i.e. sheds, greenhouses, etc.) on your property. 

Your personal belongings.  While many personal belongings are truly irreplaceable, it’s good to know that you will have insurance to help offset the cost of replacing personal items.  Most policies will insure your personal belongings for 50-70% of the amount of insurance you have on your home’s structure. Special features or options include:

“Off-Premises Coverage”  Most policies also insure your belongings if they are not physically in your home at the time of damage of loss (say, for example, that your watch is stolen while you are on a business trip).  This is called “off-premises coverage.”

“Luxury Items”  Most policies will offer a set dollar limit on the cost to repair or replace luxury items such as jewelry, furs, and silverware.  If you want to increase the insurance amount you carry for those items to their full appraised value you’ll want to consider purchasing something called a “personal property endorsement” or “floater.”

Personal Liability.  Liability means your obligation under the law.  It implies that you are financially responsible for costs and damages related to something you, as an owner, posses.  As a homeowner you are responsible for the physical safety of people on your property.  A standard homeowners insurance policy contains liability protection, usually between $100,000 - $300,000, which means that you are insured for that amount in the event that someone becomes injured due to the physical structure of your home or because of the action of persons or animals on your property.  As with coverage for your personal belongings, your personal liability coverage extends anywhere that you or your covered family members or pets travel and could do damage.  If you want greater coverage you can purchase an umbrella policy for an additional charge.

A standard homeowners policy also typically includes no-fault medical coverage.  With no-fault medical coverage anyone who is injured while in your home or on your property can submit bills directly to your insurance company instead of having to file a claim.

Expenses due to displacement. If you home has suffered damage or been destroyed and you need to live someplace else temporarily, a standard homeowners policy will reimburse you for a portion of the expenses you incur while living away from your home. Expenses your policy may reimburse you for include laundry, restaurants, hotel and motel charges, etc. This portion of your policy may also include a provision to offset the rent you could lose if you are renting out a room (or rooms) and your tenant is not able to live there during the same period. 

Now that we have looked at the four main areas of coverage in a standard homeowners insurance policy let’s turn to what types of conditions or disasters you can be insured against.