The Basics of Homeowners Insurance: What You Need to Know

Introduction

Homeowners insurance is one of the most important purchases you’ll ever make. It’s also one of the most confusing. The good news? You don’t need an expert to explain all of its ins and outs—just a basic understanding will help you keep your home safe, your family covered and any misfortunes contained.

Homeowners insurance helps protect your home, its contents, and you against the financial losses that could come from disasters such as fire, windstorms and theft.

It’s a contract between you and your insurance company.

Homeowners insurance policies are divided into two broad categories: dwelling policies (or “fire” policies) and liability policies. Dwelling coverage is for structural damage to your house–the building itself–and its contents; liability coverage helps pay for injuries or property damage caused by someone who lives in your home (such as tenants). If a visitor gets hurt on your property while visiting you or another resident of your household, liability will cover their medical bills if they sue them later on down the road over that injury because it happened during their stay at yours.*

A homeowner’s policy includes coverage for several different types of losses. These include:

• Property damage. This is the cost to repair or replace your home, its contents and other structures on your property (such as garages or sheds). It also includes loss of use–the money you’d have to pay someone else to live elsewhere while repairs are being made.
• Personal liability protection. If someone gets hurt while visiting or working in your home, this part of the policy covers their medical expenses up to a specified amount ($100K per occurrence/$300K aggregate). It also protects you if someone sues you because of an injury at your residence; it pays legal defense costs up to an additional $100K per occurrence/$300K aggregate as well as any damages awarded by a court judgment against you up until those limits are reached.* Medical payments coverage: Pays for qualified medical expenses incurred by guests who visit when they fall ill while staying overnight at another person’s house

Most homeowners policies offer several types of coverage that are divided into different sections, or “parts.”

It’s important to understand the basics of what each part covers so you know what you need to protect your home and family.

The Basics:

• Homeowners insurance is designed to protect your home from damage caused by fire, wind, theft and other disasters.
• A typical policy also covers personal property like furniture, clothing and jewelry.
• The cost of replacing these items can vary widely depending on their quality and value — but even if they’re not worth much money individually (say under $1,000), there may be enough in total for an insurer to consider them part of its payout if something happens while they’re under its protection plan!

Personal liability coverage will help you pay for medical bills or other damages if someone is injured in your home or if you cause damage to another person’s property.

It’s a good idea to have at least $100,000 worth of this type of insurance.

If you’re buying a home and want to make sure that you have enough personal liability coverage, talk with an agent about getting quotes on policies that include personal liability limits up to $500,000 (a typical amount).

Medical payments coverage can help cover medical expenses if you accidentally injure someone who visits your home.

It’s important to note that this type of coverage is only available in some states, so make sure to check with your insurance agent before purchasing a policy.

Additional living expenses coverage pays for temporary housing costs while repairs are being made on your property after a covered loss occurs.

If you’re displaced by an earthquake, flood or other disaster, this can help you pay for things like hotel stays and meals until it’s safe to return home.

Additional living expenses coverage also provides protection in cases where the damage to your home makes it uninhabitable–even if it’s only temporary–and requires you to find alternative accommodations. If this happens, additional living expenses coverage may reimburse up to 10 percent of what it would cost to rent comparable housing in the same area where you live (up to $10,000).

You should consider how much additional living expenses coverage you need based on how long it will take for repairs after an event such as fire or hurricane damage has occurred; generally speaking though most experts recommend having enough additional living expenses coverage so that even if there were no funds available through FEMA (Federal Emergency Management Agency) then at least half of all necessary repairs could still be completed before having those costs deducted from any insurance settlements received later down the line during litigation proceedings against responsible parties who caused such damages intentionally maliciously or negligently through reckless behavior without regard for human life safety needs which resulted directly from their negligence causing injuries requiring medical care treatment lasting longer than 48 hours away from home duelling even further delays duelling

Loss of use coverage pays for additional living expenses if you’re unable to live in your home because it needs repairs after a covered loss. The amount covered can vary from one policy to another.

You don’t have to have an expert explain the ins and outs of homeowners insurance; just get the basics down so you’re prepared for anything that comes your way!

It’s easy to get caught up in the excitement of buying a house, but it’s important to remember that homeowners insurance is not just for disasters. It can help cover other incidents that may occur at your home, such as theft or fire damage.

Homeowners insurance is also a good investment because it can save you money on taxes if you have a mortgage and even help get the mortgage itself!

Conclusion

When you’re ready to learn more about homeowners insurance, check out our guide to the basics. We’ll walk you through what types of coverage are available and help answer any questions that may arise along the way.