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Home Insurance Policy Options

The purpose of home insurance is to provide protection in the event a loss occurs. You will need home insurance to protect the structure or dwelling and your belongings. Home insurance policies will include a variety of coverages.

Dwelling Coverage

This is coverage that will pay to rebuild your home if it is destroyed by a covered loss. This is based on the replacement value of your home. Construction material is used as the basis for determining the cost to rebuild the structure. Older home will cost more to rebuild and often results in a coverage amount on the policy that is more than the market value of the home.

Contents Coverage

The possessions in your home are protected by the contents coverage of your policy. The amount listed on your policy will be a percentage of the dwelling coverage, such as 20 percent. This means that if the dwelling contents coverage on your home is $150,000, then the contents coverage will be $30,000.

Liability Coverage

This coverage on your home insurance policy will pay for medical costs and legal costs if a visitor or a guest on your property is injured. You will need this coverage if an injured person decides they want to sue you for damages. Coverage is also provided if a neighbors house is damaged from any element that is on your property, such as a falling tree.

Additional Living Expenses

If your home is damaged by a covered loss and cannot be lived in until repairs are made, then coverage will pay for you to live elsewhere. Coverage will pay for the cost of a hotel, any meals and many types of reasonable expenses until you home is livable.

Other Structures Coverage

Other structures on your property, such as a shed or detached garage, are covered by this coverage. The buildings on your property that are not attached to the dwelling are protected by this coverage. You can also have a fence or other type of structure attached to your property.

Policy Endorsements

These are also known as riders and are additions to your home insurance policy. A rider will be needed if you have items, such as jewelry, that are not fully covered by contents coverage. You will have basic coverage on a home insurance policy for personal possessions, such as $1000 to $2000. Possessions in your home need to be added to a list with their value. This includes collectibles, such as coins, a set of golf clubs, and many other items.

Premium Amount

The total amount that you will pay for a home insurance policy is the premium. You can lower that cost of your policy by using discounts and changing the deductible amount. Discounts that apply to a policy are for security features that include a smoke alarm and a fire extinguisher. If you raise your deductible up to $1000 or more, then your premium will go down.