What does a Homeowner's Insurance Cover?
Dwelling coverage
This is the key difference between homeowners and renters insurance: only homeowners insurance includes dwelling coverage, which covers damage to the actual structure of the home.
This includes anything from a broken door or window to total building demolition. Dwelling coverage extends to other structures on property you own, such as a fence, garden, or garage.
Not all damages will qualify you for a payout. Most companies have what’s called a “named peril” policy which lists qualifying perils or “covered events” — the damages your insurance will pay to repair. Weather phenomena like heavy wind and hail, two of the most common dangers, are usually on the list.
Other covered events might range from smoke, fire, falling ice, and water damage to vandalism and theft.
Personal property
Personal property coverage protects the belongings inside your home. Even if the object isn’t physically in your home — for instance, if your laptop or bicycle is stolen from your car — the policy kicks in.
For homeowners, the price is usually included as a percentage of your dwelling coverage, but you can raise or lower the amount as needed before buying a policy.
Personal liability
If someone’s injured in your home, or if someone sues you for damage to themselves or their property, this is where personal liability insurance comes into play. The amount is flexible. Pet owners whose animals tend to be aggressive, for example, often end up paying more.
Medical payments
This insurance covers medical costs if someone gets hurt on your property and needs a doctor’s attention. Unlike personal liability, medical coverage is on a no-fault basis; you won’t be held legally liable.
Additional living expenses
This catch-all phrase just means you’ll have money for living expenses, including a hotel or rental if you need to vacate your home after a covered peril.
In the next blogpost, we will show you what does a renter's insurance cover.