Before we start explaining what a Homeowners Insurance policy exactly covers we want to point out a few important matters:
- If you rent a home from someone you don’t need actual homeowners insurance but rather renters insurance. For more information about renters insurance please visit our renters insurance quote and renters insurance 101 areas.
- If you purchase a home and then lease/rent that home to a tenant you need a policy that is commonly referred to as dwelling fire. Another common name is Landlord Insurance. You may have liability coverage under a business insurance policy to cover this type of exposure, however that policy would be for liability coverage only… you still need to protect the home itself. For more information please visit our dwelling fire insurance quote/ landlord insurance quote and dwelling fire insurance 101 / landlord insurance 101 areas.
A standard Homeowners insurance policy provides a package of coverages. All homeowners insurance policies provide a set of common primary coverages
- Coverage for the structure of your home
- Coverage for your personal belongings
- Liability protection
- Additional living expenses
1. The Structure of Your House
Your homeowners policy pays to repair your home if damaged or rebuild from the ground up if it is destroyed by covered perils such as fire, hail, hurricane, lightning or other disasters listed in your policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear. When purchasing coverage for the structure of your home, it is important to remember this simple guideline: Purchase enough coverage to rebuild your home, NOT WHAT THE MARKET VALUE IS.
Most policies also cover detached structures such as your garage, tool shed or gazebo—generally for about 10 percent of the amount of insurance you have on the structure of your home. This limit can usually be increased via endorsement.
2. Your Personal Belongings
There’s a lot to name but narrowing it down- Your furniture, computers, clothes, TV’s and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disasters. The coverage is generally 50 to 70 percent of the insurance on the structure of your home. The best way to determine if this is enough coverage is to conduct a home inventory.
We will release our own inventory tool in the near future. Until then there are many free programs available online that you can use. We can also setup an appointment for someone to come out to your home and take a personal home inventory.
Personal belongings coverage includes personal items that are away from your home. Some companies limit the amount to 10 percent of the amount of insurance you have for your possessions. You usually also have up to $500 of coverage for unauthorized use of your credit cards. This limit can be increased via endorsement.
Expensive items like jewelry, furs, art, collectibles and silverware are covered, but there are usually dollar limits if they are stolen. To insure these items to their full value, your Homeowners Insurance policy can be endorsed or a separate policy can be issued just covering your valuables.
Trees, plants and shrubs are also covered under standard homeowners insurance for generally $500 per item. Trees and plants are not covered for damage by wind damage or disease.
3. Liability protection
Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. However most insurance companies have a list of excluded breeds. If you have a breed of pet that is on an excluded list, you either need to find another insurance company that will cover that breed or just realize the fact that you will not be covered if your excluded breed does harm someone or damage another person’s property.
The liability portion of your policy pays for both the cost of defending you in court and any court awards. The amount of coverage is capped at the limit stated in your policy documents.
Liability limits generally start at about $100,000, however we advise obtaining a higher limit. We typically find the difference in premium between a 100,000 and 300,000 liability limit is only about $10 more a year.
Your policy also provides no fault medical coverage. This means if a friend/neighbor is injured in your home, he or she can submit medical bills to your insurance company. Sounds weird that an insurance company would openly accept this type of bill, however in the long run insurance companies have found this to be a better process financially for everyone involved vs waiting for an eventual lawsuit. Medical coverage does not extend to your family or pets.
4. Additional living expenses (ALE)
ALE pays the additional costs of living away from home if you cannot live there due to damage from a covered claim. It covers hotel costs, restaurant meals, and other costs over and above your usual living expenses incurred while your home is being repaired or rebuilt.
Keep in mind that the ALE coverage in your homeowners policy has a capped limit. Some homeowners insurance policies include a time limitation. However you can generally increase the amount of ALE coverage for an additional premium.
Your ALE coverage limit is separate from the amount available to rebuild or repair your home. Even if you reach your ALE capped limit, your insurance company will still pay the full cost of rebuilding your home up to the policy limit.
If you rent out part of your house, ALE also covers you for the rent that you would have collected from your tenant if your home had not been damaged or destroyed.
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In addition to contacting us through our website feel free to reach out to us anytime at email@example.com or give us a call at 702-589-7413.
Our mailing address is 5550 Painted Mirage Rd Suite 320 Las Vegas, NV 89149. Meeting can be scheduled by appointment- we can meet at our office or your home/business.