I was introduced to home insurance for the first time when I bought my first home in 2008. Before my home purchase, I had no idea what was covered with a standard home insurance policy. Since then, I’ve learned a lot about home insurance and what is and isn’t covered. Most home insurance companies today offer six standard sections of coverage. Knowing these coverage amounts will allow you to maximize the benefits you receive from having home insurance.

Coverage 1: Dwelling

The first coverage offered is dwelling insurance. This is typically what people think of when they buy home insurance. The dwelling portion of your insurance covers the physical structure of your home; the walls, floors, ceilings, etc. This coverage protects your home from damage to the actual structure.

Coverage 2: Other Structures

It is common for homes to have other structures on the property that are not connected to the home like fences, mailboxes, and sheds. This coverage is meant to protect these types of structures, which aren’t covered under the dwelling portion of the insurance policy.

Coverage 3: Personal Property

The third coverage offered with the standard home insurance policy is personal property insurance. This coverage insures all of your belongings. Not only will home insurance insure the home, but it also insures items in the home as well. This is an essential coverage when the interior of the home sustains damage, like in a fire.

Coverage 4: Loss of Use

Loss of use insurance is the fourth coverage you receive with the standard home insurance policy. This coverage is only used if your home is damaged to the extent that you can no longer live in it. For example, if a fire causes you to have to live in a hotel for a few months while the home is repaired, loss of use will reimburse you for additional expenses you incur (additional lodging, food, gas, etc.).

Coverage 5: Liability

The typical home insurance policy’s coverage extends beyond the home and property. It will even protect you from instances where you are liable for negligent actions. Home insurance liability will insure you for legal expenses incurred if someone sues you for negligent actions. This is becoming an increasingly important coverage in an increasingly litigious world.

Coverage 6: Medical Payments

The final coverage offered is called medical payments. Medical payments on a home insurance policy is similar to medical payments or pip coverage on an auto insurance policy. This coverage is meant to pay minor medical bills of those who get injured on your property. One of its purposes is to prevent lawsuits for minor injuries.

As you can see, there are a lot of benefits that come with the standard home insurance policy. Knowing what your policy covers is an important step to maximizing the benefits of having home insurance and using your policy effectively.