Homeowners Insurance: What Does Your Policy Really Cover?

When you purchase a home, one of the first things you’re likely told is to get homeowners insurance. It’s an essential safeguard, protecting your home from unexpected disasters. But beyond the peace of mind that comes with knowing you’re covered, many homeowners might not fully understand the extent of their coverage—or its limitations. So, what does your homeowners insurance policy really cover?

What’s Typically Covered?

1. Dwelling Coverage

This part of your policy protects the structure of your home, including the walls, roof, and any attached structures like garages. If your home is damaged or destroyed by a covered peril your insurance can help cover the cost of repairs or rebuilding. Covered perils include fire, theft, and windstorms, but flooding and earthquakes are usually not covered. If you live in areas prone to these, you’ll need separate policies.

2. Personal Property Protection

This protects your personal belongings, such as furniture, electronics, clothing, and appliances, if they’re damaged, destroyed, or stolen. However, high-value items like jewelry or artwork may have limited coverage and could require additional insurance. 

3. Liability Protection

If someone is injured on your property or you accidentally damage someone else’s property, liability coverage helps cover legal expenses and medical costs. For example, if a guest slips and falls in your home, your policy can cover their medical bills and any potential lawsuit.

4. Other Structures Protection

Most homeowners insurance policies also provide coverage for other structures on your property that are separate from your home, such as a detached garage, tool shed, or fence.

5. Additional Living Expenses (ALE)

The insurance is designed to cover the additional expenses you may face if you’re temporarily displaced from their home due to damage from an insured disaster. ALE helps with the financial burden by covering expenses that go beyond your usual living costs while your home is being fixed or rebuilt. 

Conclusion

Each coverage in a homeowners insurance policy has a limit, which is the maximum amount your insurer will pay for a covered loss. You can usually adjust these limits based on the value of your home and belongings, and the cost to repair or replace them.

Homeowners insurance provides essential protection and peace of mind. It’s best to contact your insurer for more details. Contact us to speak with an agent and we can help you choose the right coverage and limits that best fit your needs!