Fact Check: What does Home Insurance Cover?

home insurance

Food, clothing and shelter are the three basic necessities of every person. From that, your home will be the most expensive thing you will ever buy. But what will you do if your precious home gets destroyed due to any natural calamity or due to any reason? At that time home insurance will come into your rescue. It will help you in getting compensation for the loss. That means home insurance gives financial protection against the disasters to the homeowners.

Here we will see what all things home insurance covers but before that let us see what exactly home insurance is.

Home insurance

Home insurance which is often called as homeowner’s insurance is a property insurance which covers private residence.This insurance consists of various personal insurance protections.A standard home insurance covers the insurance of the home as well as the things which are inside.  The rules and regulations of the home insurance differ from state to state.

  • The structure of your house

Every home insurance policy pays you to repair or rebuild your house if it is damaged or destroyed by any natural calamities like hail, fire, lightning, hurricane etc. which are listed in your policy.Most of the policies also cover the detached structures like garage; you get 10% of the amount for the damage caused to these structures.A standard policy doesn’t give any amount for the damaged cause by flood, earthquake or normal wear and tear. When you purchase coverage for the structure of your house, remember that purchase enough coverage that you will be able to rebuild your home.

  • Personal belongings

Home insurance also covers your furniture, clothes, sports equipment and other personal items. If any of these things are stolen or destroyed due to fire, hurricane or any other insured disasters. Almost 50 to 70 percent of the insurance is on the structure of the house. To determine the actual pay you might get on your personal belongings conduct a home inventory. Personal belongings also cover items off-premises. Expensive items like jewelry, furs, art, silverware etc. trees and shrubs are also included in your standard home insurance. You will get the pay for the same only if they are not covered with disease or have been poorly maintained.

  • Liability protection

This means if you or your family member can be saved from the lawsuit if other people get hurt during the property damage you will get the expenses for the treatment. Your home insurance also covers the damage caused by your pets. If your child (or even your pet for that matter) destroys any of the neighbors’ property, you will get the cover but if they ruin your property then doesn’t expect any cover.Standard home insurance even provides no-fault coverage, so if your friend or neighbor gets hurt in your home then he/she can submit their medical bills to your insurance company. In this way, expenses can be paid without a claim being filed against you. Unfortunately, it doesn’t cover the expenses if any of your family member or pet is injured.

  • ALE (Additional Living Expenses)

Additional Living Expenses pays you the additional costs of living from home if you are not able to live there because of the damage caused by disaster. Your hotel bills, restaurant meals and other costs which are over and above your regular living expenses will be covered in your insurance while your home is being built. But do remember that in your homeowner policy has limits like some policies have time limitations. Even if you use all your ALE your insurance company will still be paying you the full amount of rebuilding your home up to the policy limit. Even if you have rented a part of your house, ALE will cover you for the rent that you would have collected from the paying guest if your home would have not got destroyed.

About Jennifer Cribsly

I'm a former real estate broker who specialized in helping first time buyers be able to purchase a home. Now full time mom, part time real estate owner/investor.
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