How Does Homeowners Insurance Work?


Quick Answer

Homeowners insurance protects a homeowner from the cost of repairing damage to the home caused by a covered peril, according to Investopedia. Some policies also provide liability insurance to pay the bills of someone injured on the homeowner's property, or to pay for the cost of replacement items when a homeowner is burglarized or robbed. Not all policies are alike, however, so homeowners must make sure they purchase the right level and type of insurance to cover their needs.

Continue Reading
Related Videos

Full Answer

Although policies differ, most cover the dwelling from damages caused by fire, wind, lightning and storms. Policies may also cover other structures on the property, like outdoor buildings, barns, tools sheds and garages. For example, depending on the policy, it may cover damage to a fence or a deck, according to Allstate. Personal property protection is generally included with most policies, which insures the value of the home's contents up to a specified amount.

Notably, damage caused by earthquakes or flooding is typically not covered under a homeowner's policy. For these potential occurrences, many companies offer supplemental earthquake or flood insurance or a rider to an existing homeowner's policy to cover damages that result from these possibilities, notes Allstate.

Learn more about Insurance

Related Questions