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Homeowners Insurance Coverage: What You Get

Homeowners insurance is a bundled insurance product that provides liability and financial protection for your home structure and the personal possessions inside it. If you’re not sure what coverage options are suitable for your living situation, it’s best to contact a local agent.
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Researching and applying for homeowners insurance is often the last thing you want to think about when purchasing a new home. However, leaving homeowners insurance for too late can be disastrous if the unexpected occurs and you are caught without coverage.

What is Homeowners Insurance?

Homeowners insurance is a bundled insurance policy that provides coverage for your property structure and the personal belongings inside your home. In the event of a claim, such as weather damage or theft, your insurance benefits should partially or completely cover the cost of repairs.

If you do file a claim, you usually need to pay your insurance deductible before your insurance provider processes and pays for your covered loss. For example, if your policy has a $1,000 deductible and you have claimed $5,000 in hail damage, you need to pay the $1,000 deductible if you want your insurance provider to cover the remaining $4,000.

After purchasing homeowners insurance, you also need to pay your insurance provider a recurring premium – which can be billed monthly, quarterly, or bi-annually – to maintain your coverage. Your insurance provider calculates your premium utilizing the following factors:

  • The age, vulnerability, and general condition of your home.
  • The value of your insurance deductible.
  • Your personal claim and credit history.
  • The coverage limits and options in your insurance package.

What is Covered By Homeowners Insurance?

Dwelling protection and personal property coverage are the basic inclusions in a conventional homeowners insurance policy. You can also purchase additional coverage options if your home is exposed to atypical risks. Here are the four most important coverage options included in a homeowners insurance policy:

 

  • Personal property: If your house stores valuable personal possessions, such as electronic devices, clothing, and furniture, your insurance policy will provide partial coverage in the event of damage or theft. For particularly valuable items, such as watches, jewelry, or collectible items, it may be a good idea to purchase expanded standalone insurance policy.
  • Liability coverage: If someone injures themselves on your property, liability protection will usually cover any legal or medical expenses. Liability coverage only applies if you are found to be at fault for the injury – for example, if a guest falls through a broken step or floorboard on your home. If you have additional liability concerns, you can expand your liability protection with a personal umbrella policy.
  • Home structure: Dwelling protection covers the structural integrity of your home and any attachment structures, like garages and decking.
  • Non-home structure: If you want to extend your dwelling protection to other structures on your property, like fences, standalone garages or pools, you’ll need to discuss extending your home structure coverage option with your insurance provider.

Constraints and Limits of Homeowners Insurance Coverage

It’s important to remember that your homeowner's insurance policy does not provide coverage for all possible sources of damage to your home or property. While coverage applies for weather damage from fire, hail, and wind, it typically does not extend to natural disasters. If you live in an area prone to earthquakes, flooding, or tornadoes, it’s a good idea to purchase a separate insurance policy for extreme weather events.

Remember, homeowners are frequently caught unawares by their coverage limits after a claim event. The coverage limit is the maximum amount your insurance provider has agreed to pay for different coverage options. If you own a high-value home or expensive possessions, it’s a good idea to talk to your insurance provider and adjust your coverage limits.

Want to Know More? Contact a Local Real Estate Agent

If you’re considering policy options for your next home and want more information about homeowners insurance costs and coverages, reaching out to an experienced real estate agent can be a good first step.

Local agents can provide guidance and advice on coverage options for different types of properties across different types of regions. What’s more, a Clever Partner agent can connect you with a reliable insurance carrier, ensuring that you are getting the right insurance coverage for your living situation.

 

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Reuven Shechter
Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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