Home Insurance Coverage

The type of Home insurance coverage you need depends on two factors. The first is the type of home you have, and the second is whether you own your home or not. The most common type of coverage is homeowners insurance, which caters for people who own and live in their own house. Condo insurance and townhome insurance are similarly for people who own and live in those types of homes, while landlord insurance is designed for property investors who rent homes to others. Finally, renters insurance is intended to provide coverage to people who live in but who do not own their home.

Each type of home insurance coverage consists of a number of important components.

Coverage Components

The coverages provided by a standard home insurance policy are:

• Coverage for the Structure of Your House

  The primary coverage provided by a home insurance policy is for the structure of your house. This covers damage or loss to the house itself and to fixtures in it including electrical systems, heating and air-conditioning systems, and plumbing.

• Coverage for Detached Structures

  In addition to your house, you may have other freestanding structures on your property, such as a garage, fence, shed, or pool house. Most policies provide coverage for detached structures of up to 10 percent of the value of your house.

• Coverage for Personal Property

  Your personal property includes your furniture, appliances and other possessions (excluding vehicles). Most home insurance policies provide personal property coverage of up to 50-70 percent of the insured value of your house. This level of coverage is more than adequate for most homeowners.

  Your policy may also include off-premise coverage, and in that event it would cover your personal items for loss or damage when they are not on your property.

  Coverage for high-value items such as jewelry, furs and silverware is often limited under standard policies(coverage can vary by state). However, increased levels of protection are generally available as a policy endorsement at additional cost.

• Liability Coverage

  Liability coverage protects you against lawsuits arising from injuries or property damage caused by your negligence. It pays for the costs of your defense in court, and any awards, settlements, or compensation in favor of the injured party, up to your policy limits. No-fault medical coverage is also included in the event that someone is injured in your home or on your property.

• Coverage for Additional Living Expenses and Loss of Use

  If you cannot live in your home for a period due to damage caused by a covered peril, you may receive some compensation for excess living expenses incurred, such as hotel and restaurant bills, and loss of rental income.

• Additional Coverage

  Additional coverage may be provided at extra cost for other damage or losses incurred, such as to trees and shrubs (other than by wind and ice), costs for clean up and removal of debris, and fire department charges.

Flood Protection

Standard home insurance policies do not provide protection against flood damage. For this type of coverage you need to obtain a separate policy, which is normally effected through the National Flood Insurance Program (NFIP), or through a private insurer. You can review a Summary of Coverage which is provided by the NFIP.

Earthquake Protection

Standard home insurance policies do not provide protection against earthquakes. For this type of coverage you need to obtain either a separate policy or, if your insurance company will permit it, an endorsement to your existing home insurance coverage.

Residents of California, which is a state at risk to earthquakes due to its proximity to the Pacific 'Rim of Fire', can effect coverage from the California Earthquake Authority through authorized insurance companies.

It is important to note, however, that California is not the only state in the US which is at risk from earthquakes. The New Madrid Seismic Zone also presents significant risks based on the history of earthquakes in that region.

September 3, 2010