Coverage Update: Homeowners Insurance

Common homeowner's insurance policies will reimburse you for the cost of rebuilding or repairing your home if it is damaged by an insured peril. Your insurance policy also protects you from legal responsibility, reimburses you for lost possessions, and pays for temporary housing while your primary residence is under repair.


Coverage A, or Dwelling Coverage, will reimburse you for the cost of repairing or replacing your home if it is damaged by an insured risk. Ideal coverage amounts are between the cost of reconstruction and the complete replacement cost of your home.


Protecting detached structures like fences, pools, and sheds is the job of "Other Structures Coverage," or "Coverage B." The limit of your homeowner's insurance policy often corresponds to a percentage of your total policy.


Coverage C of a standard homeowner's insurance policy pays to repair or replace a policyholder's personal property, such as clothing, furniture, and appliances, if those items are damaged or destroyed by an insured peril. Your insurance policy has a maximum payout that is based on the item's replacement value or its actual cash value, whichever is lower.


When your home is rendered uninhabitable due to a covered peril, loss of use insurance, also known as Coverage D or supplementary living expense insurance, will pay for your reasonable living expenses until you can return. Insurance policies can include coverage for incidental costs like this.


Coverage E provides liability protection in the event that a guest is hurt on your property and files a lawsuit against you. You may choose for higher limits if you have a lot of extra money.


Coverage F of your homeowner's insurance policy will pay for the medical expenses of any visitors injured on your property.

It's important to note that natural disasters like floods and earthquakes are not covered by standard homeowner's policies. However, you may have to pay more for coverage against natural disasters like earthquakes and floods.