What Coverage is Available Through My Homeowners’ Insurance Policy?

While the exact terms of homeowners’ policies differ, most policies include similar sections.  This article breaks down the various parts of most property insurance policies starting with a general understanding of homeowners’ insurance followed by a detailed discussion of each type of coverage generally included within most policies.

Page Contents:

• What is Homeowners’ Insurance?
• What are the Parts of a Homeowners’ Insurance Policy?
• What is Dwelling Coverage?
• What is Other Structure Coverage?
• What is Personal Property Coverage?
• What is Additional Living Expenses Coverage?
• What is Personal Liability Coverage?

What is Homeowners’ Insurance?

Homeowners’ insurance policies generally protect you from certain property and liability risks. They often provide payment for damage to your home, other structures on your property, additional living expenses, and personal property. Also, if a person is hurt on your property as a result of your lack of reasonable care, then your policy may also cover medical care and other related liabilities.

What are the Parts of a Homeowners’ Insurance Policy?

Most homeowners’ policies generally consist of “form terms.”  These terms generally include: (1) a Declarations Page; (2) a Definitions Page; (3) a section describing coverage for loss of property (dwelling, other structure, additional living expenses, and personal property); and (4) a section describing liability coverage.  The first section, the Declarations Page, generally includes the specific terms unique to your contract and will usually include your specific policy’s number, the amount of time for which coverage is provided, your name and address, the address of the home that is insured, specific limits of coverage, monthly premium costs, deductible amounts, and the names of any endorsements. This is a good place to start when reviewing your policy to understand the basic terms.

What is Dwelling Coverage?

Dwelling coverage provides that the insurance company will provide payment if your home itself is damaged or destroyed. If you have a condominium unit then your policy’s dwelling coverage likely only insures the inside of your condominium and not that of the overall building.

What is Other Structure Coverage?

Other Structure coverage provides insurance for structures and buildings on your property other than your home or structures attached to your home, such as an attached garage. This can include coverage for sheds, adjacent dwelling units, and detached garages that are damaged or destroyed.

What is Personal Property Coverage?

Personal property coverage allows you to recover the money for damage or destruction of personal property such as furniture and appliances.  This does not include items that are permanently affixed to your home like light fixtures.  Sometimes homeowners’ insurance policies provide for full replacement costs of such items and sometimes merely provide for a percentage of the costs.

What is Additional Living Expenses Coverage?

Additional Living Expenses coverage provides payment of the costs that you incur if your home is damaged or destroyed and you need to live somewhere else while it is being rebuilt or repaired.  These costs can include items like hotel bills, additional transportation costs, and costs of meals.

What is Personal Liability Coverage?

Personal Liability coverage provides payment of costs arising out of any claims by others who were injured or suffered damage to their own property while on your property. This coverage also often requires your insurer to pay to defend you in a lawsuit brought by someone injured on your property and pay any awards that a court grants to that person.  Keep in mind, though, that the insurer will usually only pay up to the limit of the policy to defend you and pay out awards.