When selecting an insurance policy to cover your home, you have many options available to you. It is essential that homeowners purchase a policy of some type, but this isn’t a one-size-fits-all situation. Depending on where you live and what environmental concerns you face, you may want to get additional protection added onto your policy.
To help demystify some of the jargon that you’ll face as you shop around for a homeowner’s insurance policy, we’ve made this brief guide to explain the different types of homeowner’s insurance available to you.
What Do Standard Homeowner’s Insurance Policies Entail?
A standard homeowner’s insurance policy contains the following types of coverage:
- Dwelling coverage
- Personal liability coverage
- Contents coverage
Dwelling coverage is essentially the basis for all homeowner’s insurance policies. It covers the structure of the property itself, as well as any attached structures and built-in appliances. This provides financial protection for homeowners in the event of vandalism, theft, fire and hail.
Personal Liability Coverage
If a guest experiences an injury on your property, this type of coverage protects you by paying the expenses related to the injury – such as medical expenses. Personal liability coverage also helps out in the event of a guest damaging something on your property that is covered under your policy.
Like dwelling coverage insures the structure of the home, contents coverage insures the contents inside of the home. When filing a claim to your insurance company, you will receive the estimated value of items, such as clothing and furniture, that was lost as a result of devastation.
Optional Types of Coverage for Homeowners
While personal liability, dwelling and contents coverage are key to any homeowner’s insurance policy, there are optional coverages that you can choose to add onto the basics:
- Flood insurance
- Earthquake insurance
- Sewer backup insurance
- Other structures insurance
Flood and Earthquake Insurance
These types of insurances may be recommended, depending on where you live. Areas that are particularly prone to flooding and earthquakes may even make it mandatory for you to have your home insured. These policies have their own deductible.
Sewer Backup Insurance
This type of coverage insures you against the unfortunately common occurrence of sewer or drain backup affecting your home. This type of backup can lead to extensive water damage.
Other Structures Insurance
If you’ve got any structures on your property that aren’t attached to the main structure, you may want to get additional protection to cover those structures. Gazebos and sheds fall into this category.
Your insurance company may offer even more options, including bundles to help you save money. Speak with your insurance agent to see which types of coverage will benefit you most.