If you own a home, you should have homeowners insurance. If your home was bought on a mortgage, it’s likely that your lender will require you to have homeowners insurance. However, even otherwise, having a home insurance policy can really pay, especially if your home is damaged or your possessions are stolen or destroyed. That said, despite how important homeowners insurance is, many homeowners, unfortunately, don’t understand what exactly the insurance policy covers. Here’s a look at what a standard home insurance policy coverage is like:

Coverage for The Structure of The House

If a part of your home will need to be rebuilt due to being destroyed or damaged, your policy will cover the resulting expenses. However, most standard homeowners insurance policies do not cover damages caused due to earthquakes, floods, and routine wear and tear.

Personal Belongings Coverage

Your homeowners insurance policy will also cover your personal belongings, including your furniture, sports equipment, clothing, jewelry, etc. However, there’s a coverage limit for expensive items like silverware, furs, and jewelry. If you require additional coverage for these items, you’ll need to get a rider or floater in addition to the base policy. 

Liability Insurance

Liability insurance offers coverage for legal liability in case you cause any property damage or bodily injury to a third-party. It also pays for damage that may be caused by your pet. It is worth noting that most homeowners insurance policies offer coverage not just in your home, but anywhere else in the world. The liability limits usually start at around $100,000. You can also add additional liability coverage or get an umbrella policy, which will give you broader coverage. 

Additional Living Expenses

If you need to live away from home because your home is uninhabitable due to a covered loss, your homeowners insurance will pay for your living expenses. Keep in mind that the actual coverage offered will vary from company to company. 

Remember that there are a number of insurance companies that offer home insurance policies. So, don’t feel pressured to sign up for the first insurance policy you come across. Instead, take your time to do your research and pick a policy that best suits your needs.