Addressing Your Worries: What Does Home Insurance Cover?

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Buying a house is the biggest purchase most of us will ever make. But are you sure you are doing enough to protect this major investment? 

You already have homeowners insurance, but you probably still have questions about what is and is not protected. Answers to those questions will determine if you need to tweak your current policy, add additional riders, or feel secure knowing everything is perfectly fine. 

Have you been asking questions like, “What does home insurance cover?” Keep reading to get all the answers you need. 

Understanding the Basics of Homeowners Insurance Coverage 

Most people count on their homeowners insurance coverage to protect their house and the personal belongings inside of it. You never know when your possessions could be damaged or stolen by a burglar, and both your personal property and the house itself could be damaged by catastrophes such as bursting pipes, fires, or even natural disasters such as hail and tornadoes. 

This policy will financially protect you from all these circumstances. Additionally, if a disaster makes your home temporarily uninhabitable, this coverage will pay for you to relocate to a hotel while repairs are made. Finally, should a guest get injured and hold you liable, this policy can pay for their medical bills and (should they take you to court) your legal fees. 

The Core Components of Your Home Insurance Policy 

While there are multiple types of homeowners insurance policies, standard home insurance typically includes six different forms of protection. There is coverage for the dwelling, other structures, personal property, loss of use, personal liability, and medical payments. 

This can be a lot to keep track of for the average homeowner. Below, you will find a more detailed breakdown of these different types of protection and what they mean for you. 

What Is Covered Under Dwelling Protection? 

Dwelling protection is specifically designed to cover damage to the house itself as well as anything directly attached to it. This includes things like your porch or garage. If a covered threat ends up causing damage to the property itself, this is the policy that pays for it. 

Because of this, dwelling protection is typically enough to replace the entire house in the event of a catastrophic loss. Meanwhile, the “other structures” protection is designed to protect things like fences that are not directly attached to the house. In most cases, this amount is about 10% of your dwelling coverage. 

Personal Property Coverage Explained 

Personal property coverage is relatively straightforward. Simply put, it is designed to replace any belongings inside the house that get stolen or damaged by any covered events. 

Exactly how much of this coverage you get is up to you. Most insurers will recommend you get coverage for 50%–70% of your dwelling protection. This is typically enough to replace things such as expensive electronics and furniture. If you have other valuables (like, say, an expensive jewelry collection), you can always take out a separate rider for additional protection. 

Liability Protection: Safeguarding Against Claims 

Nobody likes to think this could happen to them, but there is always a chance someone will injure themselves while visiting your home. If this happens and that person decides to sue you, it could lead to a prolonged legal battle that could cost you significant amounts of time and money, which is why you need to know how to avoid such home insurance claims

Part of your homeowners insurance is medical payments protection that generally pays $1,000–$5,000 toward medical fees for the injured party. In many cases, this is enough to prevent a lawsuit. In case it does not, the liability protection on your policy typically covers $100,000–$500,000. This amount should be enough to significantly reduce or even eliminate potential legal fees. 

Additional Living Expenses (ALE) Coverage 

One of the biggest parts of any homeowners insurance policy is the Additional Living Expenses policy, sometimes referred to simply as “loss of use” insurance. This is designed to help you and your family with additional living expenses if you have to move somewhere else (such as a hotel) while your home is being repaired or rebuilt. 

Family arriving at a new home because their house is being repaired, carrying cardboard boxes with their belongings.

Typically, this protection is about 20% of the dwelling coverage. That is usually enough to provide peace of mind that you will not have to worry about the living expenses while overseeing the restoration of your home. 

Beyond the Basics: Additional Coverage Options 

The different forms of protection described above comprise the typical home insurance policy. If you are like most homeowners, those protections will be sufficient to meet your needs, especially since you can increase coverage in different areas as needed. 

That said, you may be worried about certain situations a typical policy does not cover. Below, you will find information about additional endorsements and riders you can add to your policy to help protect against unexpected events. 

Covering the Extras: Endorsements and Riders 

One of the most common additional home insurance endorsements (also known as riders) you can add is a scheduled personal property rider. This allows you to purchase additional protection for very valuable items or collections that might not be sufficiently protected by a standard policy. 

If you are worried about being responsible for certain utility lines, you can add a service line protection rider. Similarly, if you are anxious about your sewer lines and drains, you can get water backup coverage. Before adding anything, make sure you know enough about homeowners insurance covering plumbing costs

Depending on where you live, some of the most popular riders are designed to protect against natural disasters that are not covered by the main policy. For example, homeowners may need to get separate riders for floods and even earthquakes in certain localities. 

Events Not Covered by Home Insurance 

As you likely surmised, a typical homeowners insurance policy does not cover floods or earthquakes, nor will it cover landslides, sinkholes, or wildfires. Insect damage (such as termite damage) and mold are also not typically covered. If you have a home business, it will likely not be sufficiently covered, and you may need a separate policy to protect yourself. 

Generally, a standard policy does not protect against problems caused by wear that you could have theoretically fixed earlier. For example, if your roof is leaking because of a tornado that just came through the area, that will be covered. If your roof is leaking because it has been deteriorating over time and you have neglected to repair it, homeowners insurance will not pay for belated repairs. 

Calculating Coverage Needs and Understanding Limits 

At the bare minimum, you need enough dwelling coverage to replace your home if needed. You will also need enough other structure protection to fully replace things like fences, sheds, and detached garages. For personal property, you need enough to replace everything that is most valuable to you, and you may need to have these items appraised to know their value. 

Liability protection typically ranges from $100,000 to $500,000. You decide how much to get, but keep in mind how coverage limits work. If your costs exceed the limit, you may be stuck paying out-of-pocket expenses. 

Remember, if you are unhappy with your current policy or your limits are not high enough, that may be a sign you need a different home insurance company

The Benefits of Insuring With InsureOne 

Now you know what homeowners insurance does and does not cover. But do you know who will provide the best protection for you and your house? 

At InsureOne, we specialize in protecting upstanding homeowners such as yourself. You deserve the best protection, and that is exactly what we offer. To find out for yourself, get a quote online. Alternatively, you can also pick up the phone and give us a quick call at 800-836-2240. Finally, feel free to find an InsureOne office near you and visit us in person.