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What Does Home Insurance Cover?
A homeowners insurance policy is typically broken down into six parts:
- Coverage A - Dwelling: A house and any attached structures, such as a garage.
- Coverage B - Other structures: Any stand-alone structures — like a carport or tool shed — not attached to the home.
- Coverage C - Personal property: This covers repair or replacement of belongings or property stolen or damaged in a covered loss anywhere in the world.
- Coverage D - Additional living expenses: Sometimes called a loss-of-use clause, this helps to cover the cost of temporary relocation in the event the home is unlivable due to repair work.
- Coverage E - Personal liability: This covers the costs of another party's injuries on the insured party's property (or offsite).
- Coverage F - Medical payments: Covers medical costs incurred on the property by those not listed as residents of the household, regardless of fault.
How Much Home Insurance Do I Need?
Your insurance needs will be specific to you, but there are a number of key questions you can answer that will help guide you toward the appropriate coverage levels. The following questions can be used as a sort of home insurance calculator to help determine exactly how much homeowners insurance you will need:
- How much will it cost to rebuild my home, including detached structures (at the current rate for labor and materials)?
- How much will it cost to replace my personal property and belongings?
- What is the value of my personal assets in case someone sues me?