What is Covered by Standard Homeowners Insurance?

Reviewing the four policies available under an insured homeowners' policy.

Homeowners insurance coverage protects your home from property damage, theft, and accidents. Homeowners coverage policies typically consist of four essential components: protection for the structure of your home; coverage for your belongings; liability protection; coverage for additional living expenses.

Coverage for the structure of your home

Your homeowners insurance plan will pay to repair or replace your residence if it is damaged by fire, hurricane, hail, lightning, or another disaster listed in your policy. Most policies also cover detached structures such as a garage, tool shed or gazebo generally for 10 percent of the amount of coverage you have on the home structure.

A standard plan will not cover private damage due to flood, earthquake, or normal wear and tear.

When buying insurance for your home's structure, remember this straightforward rule: Purchase enough coverage to rebuild your home.

Coverage for your personal belongings

Your furniture, clothes, sports equipment, and other personal items are usually covered if they are damaged by fire, hurricane, or other insured disasters. The coverage is usually 50-70 percent of the amount of insurance you have on the building.

You are not entitled to coverage outside the United States for possessions that are stored offshore. Some insurance companies limit the amount of coverage for personal property on your bill to 10 percent of the amount of cover. There is also a theft of more than $500 of your credit cards.

Expensive items like jewelry, furs, art, collectibles, and silverware are covered and there are usually dollar limits on theft. To insure these items to their full value, purchase a special personal property endorsement or floater and supply insurance for its full appraised value.

Liability protection

Liability covers you against lawsuits for bodily injuries or property damage you or family members cause to others. It also pays for damages caused by your pets. So, if your dog accidentally steps on your neighbor s very expensive rug, you are covered. (However, if he or she damages your rug, you are out of luck.)

Your insurance liability portion covers both the cost of your case, along with any awards up to your policy limits.

Liability insurance typically starts at about $100,000, but it's wise to discuss your limits with your insurer. If you have a great deal of assets and want more coverage than's available under your homeowners insurance policy, consider purchasing an umbrella or excess liability insurance policy. Insurance that supplies broader protection and higher limits.

These policies provide a no-fault guarantee of reimbursements to victims of injuries in your home. However, for reimbursements due to injury or illness in your family or pet, you will be liable for a liability claim.

Additional living expenses (ALE)

ALE pays the additional costs of living away from home if you cannot live there due to damage from an insured disaster. It pays hotel bills, restaurant meals, and other incidental expenses, over and above your normal living expenses, while your home is being rebuilt.

Keep in mind that your homeowner's insurance coverage reserves for a particular amount of coverage, generally up to the limit of your policy. All that insurance will be repaid, however, even if you used up your allotted insurance.

ALE will cover you for the monthly rent that you would have received from your tenant if your residence had not been destroyed.