What Should Be Included in Basic Home Insurance Coverage? What is not included?

If you own a home, you more than likely have home insurance. Most basic house insurance policies cover certain “named perils,” while excluding other items.

A “named peril” in your home insurance policy means a situation that might cause damage to your house that is specifically named in your policy. In most basic house insurance policies, named perils include damage from wind, hail, fire, vandalism and theft. In addition to covering the structure, a basic homeowners insurance policy will also cover contents that are damaged. So if a fire burns down your house, not only would your insurance pay to rebuild your house, it would also pay the replacement cost of anything in the house that was covered under the policy.

In addition to coverage from named perils, almost all basic homeowners policies give you liability coverage. For example, if someone visiting your home slips on a wet floor and is injured, your homeowners policy would cover you if your were sued. Most basic policies also provide a range of liability coverage that extends beyond the boundaries of your property. This includes coverage if your dog bites someone and coverage if you injure someone while riding a bicycle.

While homeowners insurance covers a great many things, there are also some things it specifically excludes that you should know about.

Home insurance specifically excludes some natural disasters, most commonly earthquakes and floods. If you live in a flood- or earthquake-prone area, you need to buy a separate policy to cover damage from these disasters. Most homeowners policies do not cover water damage of any type that comes from outside the home.

While your homeowners insurance gives you liability protection, that protection does not extend to a home business. If you run a day care or catering business out of your home, you would need a separate policy to protect you.

Though basic house insurance covers your belongings, most policies put limits on highly valuable items such as jewelry and collectibles. Check your policy to see what the per-item limit is. If you’ve got items that are worth more than that, then you probably need a separate personal property insurance policy.

Disclaimer: This is for information purposes only and NOT a recommendation from Mills Insurance. Please contact a licensed insurance specialist to discuss insurance coverage’s and laws.