The 5 Home Insurance Coverage Types Explained

Posted on: 17 May 2021

If you're in the process of buying your first home with a mortgage, you'll need to get a home insurance policy as part of the process. Here are some things you should know about the types of homeowners' insurance you'll be purchasing.

Dwelling Coverage

The purpose of dwelling coverage is to protect your home's structure from damage and repairs. This coverage not only covers disasters like fires and storms but also covers theft damage as well. Be aware that dwelling coverage does not cover flooding, which is when water enters your home from an external water source, such as rainwater or from a nearby lake or river. You also do not have coverage for damage caused by earthquakes. These two natural disasters must be covered with additional policies if you are at risk. 

Other Structure Coverage

If you have a detached garage, shed, barn, or another structure on your property that is not attached to your home, these things are covered under other structure coverage. You'll want to make sure that you have enough coverage to rebuild these items from the ground up in a total loss situation, such as a fire that burns your garage down completely. 

Personal Property Coverage

All of the physical belongings in your home are covered under personal property coverage. This will help ensure that you can purchase or repair everything if your belongings were to become damaged. There are limits to how much property coverage you have, with additional policies needed for things like high-value jewelry or artwork. 

Loss of Use Coverage

Any time you are unable to use your home because it is damaged and being repaired, you will need to live elsewhere. Loss of use coverage is going to pay for a rental home, hotel, additional food expenses, and things of that nature. It can even cover buying emergency clothing and essentials if all of yours were damaged and are in the process of being cleaned or replaced. 

Liability Coverage

The purpose of liability coverage is to give you protection if someone were to be injured on your property. The best example of this is if someone were to have a bad slip and fall when walking up to your home. You would be responsible for paying for their medical bills if the injured person were to sue you for their damages, and liability coverage will pay for those bills up to your coverage limits.