What Home Insurance Covers

The Structure of Your Home means that your policy pays to repair or rebuild your home if it is damaged or destroyed by fire, tornado, hurricane, hail, lightning or any other disaster listed in the policy. However – and this is a significant however – there are exceptions that many homeowners are often not aware of, including damage caused by a flood, earthquake or routine wear and tear.

Ask Your Agent

Ask your agent to go over all coverage options with you and to help you make sure that you have sufficient coverage to completely rebuild your home and replace your possessions in the case of an insured loss. Also, work with your agent to determine if, based on where you live, you should consider additional policies to protect you from flood, earthquake, and other perils not listed in your policy.

Other Structures & Outbuildings means that your policy probably covers not just your home, but the other structures on your property, like a garage, tool shed or gazebo. Trees, plants and scrubs are also typically covered under a standard homeowners insurance policy, but generally only up to about $500 per item.

Ask Your Agent

Ask your agent to clarify, based on your individual homeowners policy, which structures on your property are covered, in what situations, and up to what dollar amount. Remember that part of the responsibility is on you to make sure your agent knows exactly what is on your property so they can properly insure it.

Your Personal Belongings, meaning everything from furniture and clothes, to sports equipment and personal items are covered if stolen or destroyed by fire, hurricane or other insured disaster, but only at their current value. What “current value” means is not always readily understood, so we wanted to give you an example. Let’s say you splurged on yourself this holiday season and bought a Sony 55” Ultra HD TV for $2500.

Unfortunately, three years from now, that once state-of-the-art television is going to be passé. Thus, should you experience an insured loss years after purchasing your TV, or any other item in your home, your insurance will only reimburse you an amount that is based on the current value of such televisions and any wear and tear. In addition, this part of the policy also provides for some coverage of more valuable items, like an engagement ring, designer shoes and handbags, or antiques, but you are not going to receive their full value should they be stolen.

Ask Your Agent

Ask your agent for advice on the easiest way to create an inventory of everything in your home, which can take a lot of stress out of the claims process and move your claim along much more quickly. Also, make sure that your agent is informed of every high value item in your home and discuss whether you need to purchase a special personal property endorsement or floater to insure these items at their fully appraised value. Finally, it’s always a good idea to have your valuable items professionally appraised, and since many collectibles and luxury items appreciate as the years pass, it’s critical to have this done on a regular basis.

Liability Protection includes coverage against lawsuits for bodily injury or property damage that you, a family member, or a pet, cause to someone else. This portion of your policy pays for both the cost of defending you in court and any court awards, but only up to the limit of the policy, which typically start at about $100,000. Also, it’s important to know that while this coverage would probably extend to a babysitter or yard worker injured at your home, it typically will not afford the same protection if the injured party is actually a household employee, such as a nanny, driver, or caretaker.

Ask Your Agent

Ask your agent what the liability limit is for your individual homeowners policy and, together, discuss the reasons why this may or may not be enough protection for you and your household. If you feel you should bump up your coverage, you may want to consider adding an umbrella policy, which provides broader coverage, including claims for libel and slander, as well as higher liability limits.

Additional Living Expenses (ALE) pays for the additional costs of living away from your home if it’s uninhabitable due to damage from a fire, storm, or other insured disaster. This part of your policy typically covers rent, hotel stays, restaurant meals, storage fees, mileage, pet boarding, laundry, and other living expenses that you might incur while your home is being rebuilt or repaired. However, be aware that the additional living expenses covered can differ quite a bit from company to company.

Ask Your Agent

Ask your agent about the limits of the ALE portion of your homeowners insurance, which could include a dollar amount and a time limit. Also, have your agent explain exactly how your insurance carrier will reimburse expenses (hint: the normal costs of your groceries could be deducted from the cost of restaurant meals), so that you can appropriately budget.