Now that you have chosen a home to purchase and researched the location, you will want to explore some different types of insurance. Most homeowners will start by researching standard policies which cover the most basic criteria. A standard insurance policy offers protection of your home, your personal possessions, some liability insurance and additional living expenses. This section will detail the coverage of standard insurance policies.

The most important part of homeowner’s insurance protects your home, inside and out. This protection includes coverage of damages caused by fire, hail, storms, lightening and any other disaster included in your policy. Standard insurance should also pay for damages to any buildings attached to your house, including garages and tool sheds. Remember that standard insurance does not cover damages caused by floods or earthquakes, but it also disregards damages associated with wear and tear. For example, if your house is unsanitary and you develop a rodent or bug problem, insurance companies will consider any ensuing damages a result of wear and tear. Review standard policies carefully to understand your individual company’s definition of wear and tear.

Standard policies also cover your personal possessions no matter where they happen to be when they are damaged or stolen. Personal possessions are belongings which you use on a regular basis like clothing and furniture. If you travel to another state or even another country and your luggage is stolen, your homeowner’s insurance should cover a portion of the possessions you lost. Coverage of personal possessions is usually a percentage (between 50 and 70 percent) of the amount of insurance you have on the actual structure of your home. If your house is insured at $150,000, you should have around $75,000 to $112,000 of personal possession insurance.

Another important part of a standard policy is liability coverage. Liability coverage was created to protect you and your family members from possible lawsuits involving any bodily injury or property damage you caused other people. For example, if a neighbor trips over a skateboard in your driveway, your liability insurance will cover their medical expenses and your legal costs should they pursue a lawsuit. Liability coverage normally starts at around $100,000, but it’s recommended that you purchase closer to $300,000. Talk to your insurance agent to assess your family’s risk and protection needs to choose the right amount of coverage for you.

Standard policies should also include some form of additional living expenses coverage. Should your house suffer damages from any disaster outlined in your policy, additional living expenses coverage will pay for you to live in an apartment or hotel while you await the reconstruction of your home. This protection also covers any restaurant meals and other miscellaneous living expenses incurred during this time.

While every homeowner needs the coverage outlined in a standard policy, homeowners should also consider optional policies offered by their insurance company. The following section reviews some optional packages that you may want to consider along with your standard policy.

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