The Foundation of Home Insurance
Your home is likely your largest investment, making home insurance essential protection against financial loss. Understanding what's covered, what's not, and how to optimize your policy ensures you have adequate protection without overpaying for unnecessary coverage.
Components of Home Insurance Coverage
1. Dwelling Coverage (Coverage A)
Protects the structure of your home:
- Covered Perils: Fire, lightning, windstorm, hail, explosion
- Replacement Cost: Should cover full cost to rebuild
- Attached Structures: Garage, deck, porch
- Built-in Appliances: Furnace, hot water heater, built-in dishwasher
2. Personal Property (Coverage C)
Protects your belongings:
- Contents Coverage: Furniture, clothing, electronics
- Temporary Living: Items while away from home
- Typical Amount: 50-70% of dwelling coverage
- Coverage Options: Actual cash value vs. replacement cost
3. Personal Liability (Coverage E)
Protects against lawsuits for bodily injury or property damage:
- Slip and fall accidents on your property
- Damage caused by your children or pets
- Accidental damage to neighbor's property
- Legal defense costs included
- Minimum $100,000, but $300,000+ recommended
Types of Home Insurance Policies
HO-3 Policy (Most Common)
- Dwelling: Open perils (covers all risks except exclusions)
- Personal Property: Named perils only
- Comprehensive: Best balance of coverage and cost
- Ideal For: Most homeowners