1. Main Dwelling Cover
This is the core component of all homeowners policies – the coverage to repair or replace your main dwelling/structure in the event of fire, storm damage, lightning strikes, or other unforeseen calamities. This does NOT include flood insurance or just general “wear and tear” in most policies, unless you add that on.
Normally, you insure the building at from 80% to 100% of its replacement cost. And if you insure detached structures, the limit will be 10% of however much your main dwelling limit is.
2. Personal Property Coverage
Much of the value of your home is in what’s inside of it, rather than just in the structure itself. In fact, damage to internal possessions can easily be half or more the cost of repairs and replacements following a covered incident that damages your home.
For that reason, it makes sense to get personal property cover with a limit set at 50% or more of your main structure limit. This, of course, will entail keeping some kind of inventory of the contents of your home, such as for appliances and furniture.
However, there may be a deductible with some policies on personal property claims, and certain items like expensive jewelry and high-price-tag electronics might be excluded unless you put a rider on your policy to cover them.
3. Liability Protection
Most homeowners policies include at least a limited amount of liability coverage against the possibility of bodily injury or property damage suits if you cause these to another person. This does not cover your own family members damaging your own property or injuring themselves, however.
In many cases, you would have a $100,000 liability limit, but this is often not enough if a serious lawsuit is filed against you. For that reason, many prefer to up this to two or three times that amount.
4. Additional Living Expenses
Another key component of most standard home insurance policies is called “additional living expenses.” This covers you when you are forced out of your home temporarily due to a fire or other major disaster that is covered by your homeowner’s policy.
It would cover things like hotel stays, eating out, and transportation costs, for example, until you can move back into your home. It also pays for lost rental income if you had been renting out all or part of your home. ALE has separate limits, normally based on a certain dollar amount or an amount of time – but it does not detract from your other coverage limits.
Even a basic homeowners insurance policy will cover these four key areas and more, but that’s not always enough. For that reason, you should talk to an insurance agent, like those at Flagler County (FL) Insurance Agency, to discuss adding riders, upping limits, or otherwise customizing your policy to fit your exact needs and preferences.