home insurance

Understanding the four essential protections provided by your homeowners policy


Homeowners coverage provides financial protection against loss due to disasters, theft, and accidents. Most standard policies include four essential types of coverage: Coverage for the structure of your home; Coverage for your personal belongings; Liability protection; Coverage for Additional Living Expenses


Coverage for the structure of your home

Your homeowner’s policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disasters listed in your policy. Most policies also cover detached structures such as a garage, tool shed or gazebo—generally for about 10 percent of the amount of insurance you have on the structure of the house.

A standard policy will not pay for damage caused by a flood, earthquake or routine wear and tear.

When purchasing coverage for the structure of your home, remember this simple guideline: Purchase enough coverage to rebuild your home.


Coverage for your personal belongings

Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disasters. The coverage is generally 50 to 70 percent of the insurance you have on the structure of the house.

Personal belongings coverage includes items stored off-premises—this means you are covered anywhere in the world. Some companies limit the amount to 10 percent of the amount of insurance you have for your possessions. You also have up to $500 of coverage for unauthorized use of your credit cards.

Expensive items like jewelry, furs, art, collectibles, and silverware are covered, but there are usually dollar limits if they are stolen. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for its officially appraised value.

Trees, plants, and shrubs are also covered under standard homeowners insurance—generally for about $500 per item. Trees and plants are not covered for disease, or if they have been poorly maintained.


Liability protection

Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. So, if your son, daughter (or even your dog) accidentally ruin a neighbor’s expensive rug, you are covered. (However, if they destroy your rug, you’re out of luck.)

The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit stated in your policy documents.

Liability limits generally start at about $100,000, however, it’s a good idea to discuss whether you should purchase a higher level of protection with your insurance professional. If you have significant assets and want more coverage than is available under your homeowner’s policy, consider purchasing an umbrella or excess liability policy, which provides broader coverage and higher liability limits.

Your policy also provides no-fault medical coverage, so if a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses can be paid without a liability claim being filed against you. It does not, however, pay the medical bills for your own family or your pet.


Additional living expenses (ALE)

ALE pays the additional costs of living away from home if you cannot live there due to damage from an insured disaster. It covers hotel bills, restaurant meals, and other costs, over and above your usual living expenses, incurred while your home is being rebuilt.

Keep in mind that the ALE coverage in your homeowner’s policy has limits—and some policies include a time limitation. However, these limits are separate from the amount available to rebuild or repair your home. Even if you use up your ALE your insurance company will still pay the full cost of rebuilding your home up to the policy limit.

If you rent out part of your house, ALE also covers you for the rent that you would have collected from your tenant if your home had not been destroyed.



If you have any questions or would like to review your homeowners insurance coverage.  Please give us a call at 916-540-7000.

One morning this week while drinking coffee, I was scanning Facebook to see what the world was up to, while the rest of us were sleeping. As I was scrolling through today’s post, I noticed a post that said my niece’s house burnt down, and that they lost everything, including their cars. As I read the story of what happened, my heart became sad for their loss. For those of us that have not experienced a loss like this, it’s hard to imagine what that would be like, losing everything. When you suffer a loss like this, it’s overwhelming, and hard to know where or how even to begin putting your life back together.

Take a moment right now and take a look at your home, think of the all things you have collected over the years, the memories you have created. Think of the furnishings that you have bought that expresses your personality, the personality of your children. Wouldn’t that be devastating to think of experiencing such a loss? No one likes to think about losing everything, but if you were to think about it, what would I do? Being prepared is so important.

As insurance agents, we discuss coverage’s with our clients, and the importance of having the right amount of coverage in the event of a loss, rebuilding your home is just one part of the picture, how many of us could actually make a list of all our possessions and their value, after a loss? One way you can be prepared for the possibility of a loss is to go through each room and make a list of all your belongings, or go through and do a live recording of each room, so you have a record of what you own. Once you do this store it in a fireproof place or a safety deposit box. I know it could be a tedious job, but believe me; if you were to suffer a loss, you would be happy you recorded all your belongings.

As I read the last of the Facebook post, I read that this happened early in the morning, they were all up starting their day, when the smoke alarm went off, they quickly assessed what was going on, and was able to get themselves and their animals out safely before the house became engulfed. What if this had happened in the middle of the night? Do you have an escape plan, if you were to experience something like this? So many things to think about, but one thing is for sure, being prepared is very important for the safety of you and your family, so take it seriously, be prepared.

Give us a call at Sky Insurance, let’s review your homeowner’s policy together, and make sure you are properly covered.


Be prepared resource

Jenny Ebinger