Homeowners Insurance

Homeowners insurance coverage applies to private dwellings and may include protection for personal possessions, contents of the home, and damage to home property depending on your policy. Homeowners insurance policies follow a Type A - D coverage levels, and you may purchase additional coverage if you need it. Homeowners insurance average costs are $286 per month.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Oct 30, 2020

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Homeowner’s insurance (HOI) or home insurance or hazard insurance is the kind of insurance policy that applies to private homes. This kind of insurance policy normally offers a range of coverage which may include protection for personal possessions, damage or loss of the home, the contents of the home, the costs of living elsewhere if the house should become uninhabitable for any reason and usually the liability of the homeowner for anything that happens in the home or at the hands of the owner within the territory covered by the policy.homeowners insurance

There is an obligation for homeowners insurance on the policy holders in that at least one of the named parties covered under such a policy must live in the home. In the case where this is not possible there is an alternative to homeowners insurance and this is known as a dwelling policy (which usually applies to holiday homes, unoccupied homes, etc.)

Homeowners insurance is a multiple-line insurance product which means that it covers the liability and the property of the insured party. There is no divisible premium, so the policy holder pays a single premium to cover all risks named under the policy.

Many forms offer a division of coverage into several categories and the overall coverage provided for any aspect is normally a percentage of that specified as Coverage A – the coverage for the main dwelling on the policy.

In the United States there are 5 classifications of coverage under a homeowner insurance policy:

Coverage A – Coverage of Dwelling

This covers the cost of the building itself and does not include the associated land. There’s normally a clause associated with this that states as long as the insurance covers at least 80% of the replacement value, then losses will be adjusted based on the cost of replacement up to the limits of the policy. This is to give a little leeway for inflation.

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Coverage B – Other Structures

This is to cover any structure not attached to the home by a common roofline (sheds, out buildings, garages etc.) that is not used for business purposes (except garages). A fence for example, even though it might connect to the home, would be considered a detached or other structure.

Coverage C – Personal Property

This covers the loss of personal property in the dwelling with limits imposed for theft and certain classes of items. This would include any belongings such as furniture and clothing as well as appliances (refrigerator, oven, etc.) that are not permanently attached to the home.

Coverage D – Loss of Use/Additional Living Expenses

This covers the expenses incurred through additional living expenses and loss of rental income (but not loss of additional service charges). If you suffer a loss to the home that forces you to move out, this would pay for hotel and even food expenses while you’re not able to use the home.

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Additional Coverage

Can cover anything from damage to plant life to debris removal. The risks covered under a policy in this section can vary greatly.

Additional Homeowners Insurance Definitions and Explanations

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