What Is Covered by a Standard Homeowners Policy?
A standard homeowner’s insurance policy incorporates four essential types of coverage. They are as follows:
- Coverage for the structure of your home.
- Coverage for your personal belongings.
- Liability protection.
- Additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster.
Your personal belongings:
In this policy your furniture, clothes, sports equipment and other personal belongings are covered in case if they are stolen are damaged by fire, hurricane or other insured catastrophe. Many companies provide coverage for 50% to 70% of the amount of insurance that is dedicated to the structure of your home.
The policy includes off-premises coverage which means that your belongings are covered anywhere in the world, unless you opt against off-premises coverage.
The structure of your house:
This part of the policy takes care of the repair and rebuilding of your home if it is damaged or destroyed because of fire, hurricane, hail, lightning or any other disaster listed in your policy. The policy does not cover situations like flood, earthquake or regular wear and tear. While purchasing coverage for the structure of your home, make sure you have enough to rebuild your house.
Regular standard policies also cover structures that are separated from your house like garage or tool shed. These structures are generally covered for approximately 10% of the home insurance policies premium amount you have on the structure of your home.
Liability is the policy which covers you against lawsuits for physical injury or property damage that you or your family member might cause to other people. It also pays for the damage that might be caused by your pets. The claims of home insurance pays for both the cost of defending you in court and any court awards – till the amount for which the policy is made. This policy not only covers you when you are in your house but also anywhere in the world.
Additional living expenses:
This policy covers the additional cost of living at a different place from home if you cannot live there because fire, storm or other insured calamities. It covers hotel bills, restaurant meals, and other expenses over and above your usual living expenses incurred while your house is getting reconstructed.
The ALE policy comes with amount limits and time limitation. The amount of ALE coverage is different from the amount allotted to rebuild and repair your home.