What Does Homeowners Insurance Actually Cover?

What does your homeowners insurance policy really cover? Find out today.

As a continuation of our series on the relationship between insurance and real estate, I recently had the privilege of sitting down once more with Roger Heighton of Farmers Insurance to tackle another important question: What does homeowners insurance actually cover?

In short, there are four subcategories of coverage Roger says all policies have:

1. Coverage A (or dwelling coverage). This subcategory relates to the amount of coverage you need to rebuild the home if necessary.
   
2. Coverage for personal belongings. This coverage insures the items within your home, as opposed to the home itself.
   
3. “Loss of use” coverage. This aspect of your coverage would take care of living expenses in the event that you need to temporarily relocate while your home is being rebuilt. Loss of use coverage does not, however, cover your mortgage.
   
4. Liability protection. If someone else claims you are responsible for an injury they sustained while on your property or damage to their own property, this type of coverage will protect you. Liability coverage also extends to accidents outside of your property, as well. If, for instance, you were biking on a trail and accidentally crashed into someone, your home insurance could cover the lawsuit that could arise from this.

If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.