Today you are going to learn everything about home insurance policy. This will teach you how and why you need home insurance policy even if you already have one. Home Insurance policy is for a home owner. It is not appropriate for houses being rented to others or an investment property. 

Six parts composed your homeowner's insurance policy basics. The dwelling amount which is called the coverage is where it all begins. The dwelling amount should be a replacement or the rebuild cost. How big the check has to be to rebuild that house if it gets hit by lightning and burns to the ground? 

The next part is other structures. Is the barn available? Is garage part of your other structures? Do you have a shed? Is swimming pool part of your other structures? These buildings are part of 'other structures'. For other structures, the default is always 10% of the coverage. So if you have a dwelling with the value of $400,000, your other structures will automatically get $40,000 for free. If you need more you can buy it and if you don't there's no credit for taking it off. 

The next important thing on this list is what is known as personal property. 50% of the dwelling amount is the typical value. The definition includes everything that are considered your 'sutff'. Your 'stuff' means if you were to move you would take with you. It includes basically everything from your drapes, your rugs, to your clothes and even electronic devices. 50% is the typical amount while some companies offer up to 70% of the coverage without any extra charges. Check out if you need a reliable home insurance. 

The next part is loss of use. A house that is made unusable or uninhabitable while it is being fixed is considered the part of loss of use for this part. The typical value for this coverage is 20% So in this case it is $80,000. You can send your laundry out, eat your meals out, and stay in a hotel if you need to with this amount of $80,000 which will be available for you to use to love elsewhere. 

Liability coverage is the next coverage. If you get sued, this is the amount that you can use. If your dog bites a neighbor or if you're cutting down a tree with your chainsaw for the first time and it lands on your neighbor's car are some examples. When you're negligent and someone sues you this is for those types of things. Even a million are what most people choose but your limit is at $300,000 are common but more commonly today, the amount is $500,000. 

Medical payment for up as high as $5,000 is used for a guest who comes on your premises or maybe heard on your premises. You can use this to help other people, like 'goodwill' coverage. 


These six parts are important for how homeowner's insurance policy works. Visit if you have questions.