HOMEOWNERS INSURANCE AGENCY

Liability covers you against lawsuits for bodily injury or property damage that you, your family members or your pets accidentally cause to other people. The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy.

Liability limits generally start at about $100,000. However, experts recommend you purchase at least $300,000 worth of protection. Some people feel more comfortable with even more coverage, like an umbrella or excess liability policy, which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits. Generally, umbrella policies cost between $200-$350 for $1 million of additional liability protection.

Your policy also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage. It does not, however, pay the medical bills for your family or your pet.

Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage for 50-70% of the amount of insurance you have on the structure of your home. So if you have $100,000 worth of insurance on the structure of your home, you would have between $50,000 to $70,000 worth of coverage for your belongings. The best way to determine if this is enough coverage is to conduct a home inventory.

This part of your policy includes off-premises coverage. This means that your belongings are covered anywhere in the world, unless you have decided against off-premises coverage. Some companies limit the amount to 10% of the amount of insurance you have for your possessions. You have up to $500 of coverage for unauthorized use of your credit cards.

Expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen. Generally, you are covered for between $1,000 to $2,000 for all of your jewelry and furs. To insure these items to their full value, purchase a special personal property endorsement, or floater, insuring the item for its appraised value. Coverage includes “accidental disappearance,” meaning coverage if you simply lose that item, and there is no deductible.

Trees, plants, and shrubs are also covered under standard homeowners insurance. Generally you are covered for 5% of the insurance on the house—up to about $500 per item. Perils covered are theft, fire, lightning, explosion, vandalism, riot and even falling aircraft. Wind or disease losses are not covered.

The typical homeowners policy offers plenty of coverage for personal property, usually offering a limit equal to half of the amount reserved for the residence. (For example, your home is covered for $150,000, so your contents and furnishings are covered for $75,000). While this is generous coverage, it doesn't extend to all types of property for all causes of loss. Certain property types, because of its high value and liquidity, are far more vulnerable to loss either easily destroyed, easily stolen or both. For instance, an insurer protects your sofa right along with your fur coat for the same basic premium, but the two types of property don't represent the same chance loss. Recognizing this fact, insurers put more limitations on basic policies.

When theft results in property loss, coverage under a standard homeowner policy is severely limited (generally between $1,000–$2,500) for the following types of property:

• Jewelry, watches, furs and gemstones
• Dinnerware, serving sets, trophies and similar property made of or plated with silver, gold, platinum or pewter
• Firearms and accessories

Additionally, several categories of property are subject to modest limits (generally between $200–$2,500) of coverage, regardless of how the item was damaged (theft, fire or accidental breakage). Specifically:

• Money, bank notes, coins, medals, gold, silver and platinum (other than jewelry or dinnerware)
• Securities, accounts, deeds, tickets, stamps, manuscripts and passports
• Watercraft and related property including their trailers
• Trailers not used with watercraft
• Business property located in your residence
• Business property located away from your residence
• Certain types of electronic property (CD players, VCRs, TVs, radios, computers, and related accessories), which is lost or damaged while in a car or is located away from your home and used for business