For many, buying a home is the single most important investment they will make in their lifetime. Because of this, it’s especially important to protect that investment the best way you can. To help you better understand how a homeowners insurance policy works, let’s break down the six basic coverages of a typical homeowners policy:


What does the dwelling portion of a homeowners policy cover?: This coverage pays to restore your home to its original state before the insurance claim was filed. Anything from fire, windstorm, hail, lightning and vandalism is covered.

How much coverage do you actually need?: This value is determined by the estimated cost to rebuild your home which may be determined by an insurance adjuster.

Other Structures

Other Structures are any structure that is detached from the dwelling such as a shed, a fence, or a detached garage. If you were ever in a situation where filing a claim with your insurance company was necessary to restore these structures, this portion of your homeowners insurance policy would apply.

How much coverage do you actually need?: Typically speaking, most insurance policies cover detached structures about about 10% of the total amount of insurance that you carry on your home.

Personal Property

Your personal property are basically your belongings i.e. clothing, furniture, kitchen items.

How much coverage do you actually need?: There is more than one way to go about covering your personal property as it relates to insurance. Normally, actual cash value or ACV is included in a typical homeowners insurance policy. Replacement Cost Coverage is optional. In order to effectively determine the cost of your personal property, it is highly recommended that you do a home inventory. A home inventory is a breakdown of everything in your home from clothing in your closet, jewelry, kitchen utensils, cookware, exercise equipment, entertainment systems, etc. It is much more difficult and a much longer process to determine these values if you do not have a home inventory to refer to. Oftentimes, you won’t remember every little thing in your home. Take care pictures of your items and determine the value of each before disaster strikes. You’ll be thankful you did!

Loss of Use

If you suffer a disaster like a fire or a windstorm or any other covered loss that effectively makes it impossible to live in your home, Loss of Use will pay for additional living expenses during the process of having your home rebuilt. For example, if you need to stay in a hotel, these costs will be covered under the Loss of Use portion of your homeowners insurance policy.

How much coverage do you actually need?: Typically, Loss of Use Coverage is approximately 20-30% of your dwelling coverage limit.

Personal Liability

This particular coverage is for instances when another party is injured as a result of an occurrence in your home i.e. a slip and fall. This coverage also applies to another party’s property being damaged while in your home.

How much coverage do you actually need?: A typical homeowners insurance policy offers $100,000 of personal liability coverage per occurrence. If you feel you may need higher limits, we will be more than happy to discuss your options with you. Now, a homeowners insurance policy has certain limits regarding coverages for injuries. One option you may want to consider is purchasing an umbrella policy. An umbrella policy is extra coverage that would kick in if the limits under your homeowners insurance policy were exhausted. If an incident does happen in your home where someone becomes injured and you are sued as a result, your investments and savings could be at risk. Purchasing an umbrella policy may be a very wise choice.

Medical Payments

If someone suffers an injury while on your property that requires medical treatment, this portion of your insurance policy would cover that. Your policy’s limits are listed on your policy’s declarations page (the first page of your policy). It is important to keep in mind that if injuries sustained are bad enough to exhaust your policy’s limits, you are directly responsible for covering the remaining costs. Again, this is another reason why obtaining an umbrella policy is smart.

No one knows when disaster may strike. Of course, no one wants to go through life in fear of financial ruin. Planning for the future and giving yourself a sense of security and peace of mind is what insurance is all about. Take the necessary steps to protect yourself, your loved ones, and your futures! We’re here for you!