The typical homeowners insurance policy covers the house, the garage and other structures on the property, as well as personal possessions inside the house such as furniture, appliances and clothing, against a wide variety of perils including windstorms, fire and theft. The extent of the perils covered depends on the type of policy. An all-risk policy offers the broadest coverage. This covers all perils except those specifically excluded in the policy.
Homeowners insurance also covers additional living expenses. Known as Loss of Use, this provision in the policy reimburses the policyholder for the extra cost of living elsewhere while the house is being restored after a disaster. The liability portion of the policy covers the homeowner for accidental injuries caused to third parties and/or their property, such as a guest slipping and falling down improperly maintained stairs. Coverage for flood, earthquake and hurricane damage is usually excluded and must be purchased separately.
If you rent an apartment or home, you’ll need an insurance policy to cover your belongings. Your landlord’s property insurance policy covers losses to the building itself; whether it’s an apartment, a house, or a duplex but does not cover your possessions. Your personal property and certain liabilities, however, can be covered through a renter’s insurance policy.
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