Homeowners insurance provides you with a lot of options to match your unique needs, but sometimes all that choice can be confusing. Learn more about the insurance policy basics and talk to your insurance Agent about the specifics. Your ERIE Agent can help you review and decide what options are right for you.
A standard homeowners insurance policy includes four types of coverage:
This part of your policy pays to repair or rebuild your home for damage caused by most common risks. Typically, damage caused by fire, wind, hail, or lightning is covered under this part of the policy. Insurance for flood, earthquake, water and sewer backup damage must be purchased separately.
Most standard policies also cover structures that are detached from your home such as a garage, tool shed or gazebo. Generally, these structures are covered for about 10-20 percent of the amount of insurance you have on the structure of your home.
When deciding on the limits of your coverage — the maximum amount the insurance company can pay — make sure that your policy covers the cost to replace the structure, not market value or just what you still owe on it.
Whether the contents of your house — furniture, clothing and other items — are stolen or destroyed in an insured disaster such as a fire, they are covered under this part of the policy. Most companies provide coverage for about 50-75 percent of the amount of insurance you have on the structure of your home.
Conduct a home inventory to determine if that’s enough coverage for your personal belongings. If the amount is insufficient, or if you have particularly valuable items like fine art and jewelry, you may need to purchase additional coverage, called a floater.
Additionally, most homeowner policies contain internal sub-limits for such items as guns, furs and silverware that can limit the amount of recovery. Also, most policies limit contents coverage for property kept at an additional residence. Buying specific coverage may be the best option for maintaining full coverage in these instances.
Standard homeowners policies also provide limited coverage for trees, plants and shrubs as well as unauthorized use of your credit cards.
If the damage from a fire, storm or other insured peril forces you out of your home, this part of the policy covers the expenses incurred while your home is being rebuilt. Many policies provide coverage for about 20 percent of the insurance on your house or limit coverage to expenses occurred over a twelve month period. Our policies do not permit an increase in this coverage.
If you rent out a portion of your house, additional living expenses coverage also reimburses you for the rent that you would have collected from your tenant if your house had not been damaged or destroyed.
Liability protection covers you against claims or lawsuits for bodily injury or property damage that you or your family members negligently cause to other people or property. It also pays for injury or damage caused by pets.
So if your son, daughter or dog accidentally ruins your neighbor’s valuable rug, you’re covered. But if they destroy your rug, your liability coverage does not provide compensation.
Your policy also provides medical coverage. In the event a friend or neighbor is injured in your home, he or she can submit the medical bills to your insurance company. Expenses are paid without the injured party filing a liability claim against you. Liability coverage pays for both the cost of defending you in court and any court awards up to the limit of your policy. This coverage applies anywhere in the world.
You can also purchase an umbrella or personal catastrophe liability policy to provide broader coverage, including claims against you for libel and slander, and higher liability limits.
If your apartment burns, the landlord may be reimbursed for the cost of the building, but unless you have renters insurance, you will not be compensated for your contents.