Home Insurance FAQs

A home is more than just a structure where you live. It's where you keep your possessions, relax after a long day and keep warm on a cold night. It houses your family and all your memories. That's why it's important to protect it with insurance, so that if an unexpected event occurs, you are covered.

What's covered in a standard homeowner's policy?

A standard policy has four main types of coverage: coverage for the structure of your home, your personal belongings, liability protection and additional living expenses.

Structure of Your Home

You should buy enough insurance so that you could rebuild your home if it is damaged or destroyed. Most standard policies also cover structures that aren't attached to your home as well, such as garages and sheds.


Liability coverage protects against bodily injury and property lawsuits. It pays for your defense in court and any money you are required to pay, up to your policy limit. This includes no-fault medical coverage, if someone is injured in your home.

Personal Belongings

Most policies offer coverage of your personal belongings between 50 and 70 percent of the amount you have on your home. You should conduct a home inventory before you purchase insurance, so that you can determine what amount is needed. Most policies cover your possessions anywhere in the world.

Additional Expenses

If your home is damaged so badly that you must leave during repairs, a standard policy will pay for your hotel stay, restaurant bills and even reimburse you for money lost, if you rent out part of your home.

Is my home covered in the case of an earthquake or flood?

You need to purchase flood and earthquake insurance separately. Most insurance companies offer this type of coverage. They differ from coverage for other disasters. For example, earthquake insurance covers a percentage of the damages instead of a dollar amount. Talk to your insurer to get the specifics.

What's the difference between actual cast value and replacement cost?

An actual cash value pays to rebuild your home, minus depreciation. A replacement cost policy pays to replace your home and/or possessions without a deduction.

Do I have to buy home insurance?

You aren't legally required to have home insurance like you are car insurance. However, if you finance your home through a mortgage company, they will require you to have some kind of insurance policy. Even if your home is paid in full, it's wise to have home insurance to protect your investment.