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What Does Your Homeowners' Insurance Policy Cover?

by Courtney Ronan

It's ironic that a document of such great importance to homeowners is one that they often don't consider until disaster strikes. Unfortunately, that's precisely the time when they discover that they're not covered for the things they desperately need when nature rears its sometimes ugly head or when a simple case of bad luck strikes. As we've mentioned before in previous articles, flood insurance is typically not included in your homeowner's insurance policy. We're in the middle of flood season, and those of us who swore it couldn't happen to us could very well find ourselves in such a situation. What if a frozen pipe bursts in your home? Everyone is vulnerable.

You know that you purchased insurance ages ago when you bought your home, but you haven't reviewed the document in years. Perhaps better coverage was out of your financial means back then, but it's within your means now. Or, as is the case within many households, one spouse may have taken the initiative for purchasing homeowner's insurance. The other spouse assumes all has been taken care of and never asks to review the terms of the policy. Regardless of the scenario in your household, it's a good idea to take inventory of your homeowner's insurance policy periodically and assess whether or not you and your family need additional coverage in key areas.

On the other hand, your homeowner's insurance policy may cover some items about which you're not even aware. The following items typically are covered under homeowner's insurance policies. However, it's important to emphasize that you can't take this list for granted. By all means, take a close look at your own policy and find out precisely for what you're covered. Keep in mind that the items listed here can vary according to the terms of your specific policy, as well as the dollar amount you purchased.

Your home in general, which includes any extensions or attachments to your house, such as a garage. Policies usually will include coverage for any rental units that are considered part of your home.

The "outdoors" around your home, meaning your lawn and landscaping (shrubs, flower beds and trees).

Buildings or structures that sit on your property but are not attached to your home. This includes greenhouses, tool sheds, garages that are not connected to the house, pool houses/cabanas, guest houses and gazebos.

Any vacant land that you either own or rent. Most policies, however, exclude farmland under this definition.

All living expenses incurred by you and your family if your home is damaged to the extent that you cannot reside there for the immediate future. In addition, if you rent part of your home out to tenants and that portion of your home is unlivable due to damage, your rental payments are covered under your insurance policy.

Possessions belonging to you and your family. This includes the personal contents of your home and any additional buildings/structures on your property, as well as the possessions belonging to guests who were staying in your home when disaster struck. Note, however, that most insurance policies will not cover the possessions of any tenants who were residing in your home at the time of the disaster.

Possessions belonging to friends that you may have been borrowing or keeping in your home temporarily (for example, storing a gift for friend who didn't want a spouse or child to see the surprise before presenting it to him/her).

Cemetery plots.

In the event that, at the time of disaster, you were facing attorney's fees and court expenses, medical bills or settlements resulting from claims brought against you for property damage or bodily injury to others, those costs often are covered.

Legal responsibility for any checks forged with your name, the unauthorized use of your credit cards or any counterfeit currency that was accepted in good faith.

Because homeowner's insurance policies, like any other official document, often contain somewhat confusing language, write down any questions you have as you look through your policy, and ask your insurance representative for a full explanation. If your financial standing has improved since you took out your policy, find out what the next level of coverage is, its cost and whether or not you and your family could benefit from the additional protection. Various regions of the country, of course, are vulnerable to certain weather conditions (hurricanes and tornadoes, for example), as well as natural forces (earthquakes). Ask friends and relatives -- particularly those residing in the same city -- what type of coverage they have chosen and if they're satisfied. As a homeowner, you regularly inspect your appliances and conduct tune-ups as needed. You should approach your homeowner's insurance policy in the same manner. It could prove to be one of the most valuable possessions you own.

Published: April 12, 2000

Use of this article without permission is a violation of federal copyright laws.

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Courtney Ronan is a freelance writer who contributes a weekly column profiling various communities. She also writes a weekly review of real estate related web sites. Courtney's career in journalism has included recent stints as managing editor of Agent News and as associate editor of Texas Business magazine.

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