Standard homeowners insurance
A standard homeowners insurance policy includes four essential types of coverage.
Coverage for the structure of your home.
This part of your policy pays to repair or rebuild your home if it is damaged or destroyed by fire or another disaster listed in your policy. It does not pay for damage caused by a flood, earthquake or routine wear and tear.
Most standard policies also detached structures such as a garage, tool shed or gazebo. Generally, these structures are covered for about 10% of the amount of insurance you have on the structure of your home. If you need more coverage, talk to your insurance agent about purchasing more insurance.
Coverage for your personal belongings.
Covers your furniture, clothing and other personal items if they are lost stolen or destroyed by fire or other insured disaster.
Typically insurance companies provide coverage for 50% to 70% of the amount your home is insured for. In addition to that you would also have between $50,000 to $70,000 coverage on your belongings.
To determine how much you need for adequate coverage you should take a home inventory.
This section of your policy also covers your belongings off-premises anywhere in the world. Some companies limit the amount of coverage to 10% of the amount of insurance you have on your possessions.
You should know, while expensive items such as jewelry, furs and silverware are covered there is usually a limit as to how much the insurance company will pay if they are stolen.Typically, your jewelry and furs are covered for between $1,000 to $2,000 for everything. If this is not adequate coverage for all your jewelry, silver etc., you can purchase a special personal property endorsement or "floater" and insure the items for their appraised value. This coverage includes "accidental disappearance," that is, coverage if lose the covered item. There is no deductible.
Also covered under standard homeowners insurance are trees, plants and shrubs. They are usually covered for 5% of your house insurance up to about $500 per item. However they are not covered for damage by wind or disease.
Liability protection.
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.
The liability portion of your policy also pays for the cost of defending you in court and any court awards, up to the limit of your policy. You are also covered anywhere in the world, not just at home.
Liability limits generally start at about $100,000. Some people feel they may need more coverage.
You can purchase an umbrella policy, or excess liability policy, which provides broader coverage, this includes claims against you for libel and slander, and higher liability limits. Typically, umbrella policies cost between $200 to $350 for $1 million of additional liability protection.
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