Home insurance, also known as homeowner’s insurance or property insurance, provides financial protection for your home and personal belongings in the event of damage or loss due to covered perils. These perils typically include hazards like fire, theft, vandalism, windstorm, hail, and certain types of water damage.
Home insurance policies generally consist of several types of coverage:
- Dwelling coverage: This covers the structure of your home, including the walls, roof, floors, and attached structures like a garage or deck, against covered perils.
- Personal property coverage: This provides coverage for your personal belongings, such as furniture, clothing, appliances, and electronics, if they are damaged or destroyed by covered perils, whether they are inside or outside of your home.
- Liability coverage: This protects you financially if someone is injured on your property and you are found legally responsible. It can help cover medical expenses, legal fees, and damages awarded in a lawsuit.
- Additional living expenses (ALE) or loss of use coverage: If your home becomes uninhabitable due to a covered loss, this coverage helps pay for temporary living expenses, such as hotel bills, rental accommodation, and restaurant meals.
- Other structures coverage: This covers structures on your property that are not attached to your home, such as a detached garage, shed, or fence.
Similar to auto insurance, home insurance premiums are based on factors such as the location and age of your home, its replacement cost, the amount of coverage you select, deductible chosen, and any additional endorsements or riders you add to the policy.