What is Included in a Homeowners Insurance Policy?

Homeowners’ insurance policies offer a range of coverages to protect your most valuable asset.

Apr 30 | 5 minutes read
homeowners insurance policy


Your residence is more than merely a shelter; it could be your most precious possession, one that might be too expensive to rebuild if catastrophe occurs. This is why safeguarding your home with the appropriate homeowners insurance is essential.


Typical home insurance policies usually encompass six primary coverages:

  1. Home Structure: Covers damages to the main house and attached elements, like a veranda.
  2. Separate Structures: Ensures protection for detached structures on your land, such as a shed or a fence.
  3. Personal Possessions: Reimburses for fixing or replacing stolen or damaged personal items.
  4. Additional Living Expenses: Supports covering temporary housing costs while your residence is being fixed.
  5. Personal Liability: Offers coverage if you accidentally cause injury or property damage to someone or through carelessness.
  6. Medical Coverage: Handles the costs of treating individuals injured on your premises, regardless of who is responsible. It also extends to cases where you, a relative, or a pet causes injury to someone off your property.


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The Home Structure coverage is designed to provide adequate funds for rebuilding your residence. For separate structures, insurance covers 10% of the Home Structure's protection. Personal property insurance typically covers 50% to 70% of the home structure's insurance value. For expenses incurred during temporary relocation, the coverage amounts to 20% of the home structure's insurance. Personal liability protection varies between $100,000 and $500,000, while medical expense coverage handles costs from $1,000 up to $5,000.


Housing protection encompasses the architectural aspects of your residence, including elements such as walls, floors, windows, and roofing. Integrated appliances, like heating units, are typically covered under this protection. Moreover, connected features like garages, porches, or decks also fall within the scope of your housing coverage.


Coverage for Separate Structures as the name suggests, separate structures coverage offers insurance for constructions on your property that are not connected to your main residence. This can encompass structures such as a detached garage, shed, or fence.


Coverage for Personal Possessions: Personal property pertains to your individual belongings, such as clothing, furnishings, electronics, and appliances that are not integrated into your home. The majority of home insurance policies provide coverage for these items regardless of location, not just when they are inside your residence. For example, if your bicycle is stolen from outside a shop, it will probably be covered (after accounting for your deductible).


Often referred to as "extra living expenses" displacement coverage within your homeowners’ policy can prove valuable if your dwelling is rendered uninhabitable because of damages. This coverage may take care of expenses like temporary lodging, meals at restaurants, or other costs associated with residing elsewhere when your home is made uninhabitable due to a covered disaster.


Liability Protection: This component of your insurance offers monetary support in case you are sued for harming someone or causing damage to their belongings. Generally, this coverage extends to all individuals living in your home, pets included. As an example, if your dog injures someone in a public space, you may be covered by this policy feature.


Medical Payments Protection Comparable to liability coverage, this policy feature addresses situations where you inadvertently injure someone who does not belong to your household. Unlike liability coverage, medical payments protection does not necessitate a lawsuit or the establishment of fault for the payout to be applicable.


homeowners insurance policy


Exploring Homeowners Insurance Policy Types

A Guide to Your Choices Various policy forms exist in the realm of homeowners insurance, each providing unique coverage levels. It's crucial to familiarize yourself with these differences, as insurers might use alternative names for each policy type.


The Go-to Option: The HO-3 Policy Frequently dubbed the "special form," the HO-3 insurance policy ranks as the most popular choice for homeowners. Mortgage lenders often mandate that borrowers maintain at least this coverage level.


The HO-3 policy safeguards your home against damages from a broad array of causes, with specific exceptions such as earthquakes or floods. When it comes to your possessions, however, the policy solely covers damages resulting from explicitly listed perils.


Maximum Security: The HO-5 Policy for those in pursuit of the most all-encompassing coverage, the HO-5 insurance policy serves as the optimal selection. This policy addresses damages to both your home and personal property, barring only the explicitly stated perils. Generally reserved for well-kept homes situated in low-risk zones, this option may not be available from all insurance carriers.


Narrower Protection: HO-1 and HO-2 Insurance Policies HO-1 and HO-2 homeowners’ insurance policies are less common, as they only cover damages resulting from events explicitly enumerated in the policy.


Additional policy options encompass HO-4 insurance tailored for renters, HO-6 designed for condominium owners, HO-7 catering to mobile home residents, and HO-8 — an infrequently utilized policy that offers limited coverage for aging properties.




In conclusion, homeowners’ insurance policies offer a range of coverages to protect your most valuable asset: your home. With typical policies covering home structure, separate structures, personal possessions, additional living expenses, personal liability, and medical expenses, it is crucial to understand the different policy types available to cater to your unique needs. From popular policies like HO-3 and HO-5 to more limited options like HO-1 and HO-2, as well as specialized policies for renters, condo owners, and mobile home residents, taking the time to familiarize yourself with these options will empower you to make an informed decision and secure the most appropriate protection for your home and belongings.


You can always find the smartest investment opportunities with HOUSIFY all over the USA.

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