Homeowners insurance is a package policy that protects you against disasters. A standard policy insures the home itself and the things you keep in it. It covers damage to your property and your liability, or legal responsibility, for injuries or property damage you or members of your family cause to other people. This includes damage caused by your pets.
What isn't covered
Disasters are covered, with important exceptions:
- Floods
- Earthquakes
- Poor maintenance
Flood and earthquake coverage require separate policies. Maintenance issues are the homeowner's responsibility.
How much homeowners insurance do I need?
It's a great question, and one that's often overlooked. You need enough insurance to cover:
- The structure of your home
- Enough to rebuild your home at today's construction costs. Don't include the value of the land, and don't base it on the price you paid.
- The contents of your home
- Your personal belongings.
- Additional living expenses
- The cost of living somewhere else while your home is repaired.
- Your liability to others
- Protection if someone is hurt on your property or you damage someone else's.
