Homeowners insurance protects against loss by fire.
There are some significant expenses that come with owning your own home, such as repairs and maintenance. Most homeowners carry homeowners insurance to help protect their finances in the event of an unexpected loss caused by a fire or windstorm. Homeowners insurance typically includes liability protection and no-fault medical coverage in case someone gets hurt on your property, but liability and medical coverage typically does not extend to you or your immediate family.
Coverage
Your homeowners insurance policy typically includes a variety of different coverages under the same policy. Every policy is unique, but most include coverage against damage to the physical structure of your home, coverage for damage to your personal belongings, compensation in the event your dwelling become unlivable due to a disaster and you have to find temporary living quarters, and personal liability protection.
Liability
The liability portion of your homeowners insurance policy protects you against financial loss in the event you are sued for property damages or bodily injury caused by you, one of your family members or your pets. This coverage extends to costs associated with defending you in court as well as any damages awarded by the court. You are covered up to the limits of your homeowners insurance policy. The Insurance Information Institute recommends the liability portion of your homeowners policy be at least $300,000. The liability portion of your homeowners policy covers you worldwide, and not just for incidents that happen in your home. The liability portion of your homeowners policy does not cover damages or injuries to you or your family that were caused by you or members of your immediate family.
No-Fault Medical
Homeowners insurance policies typically include a provision for no-fault medical coverage. If a person visiting your home is injured in your home, your homeowners policy will pay the resulting medical bills, up to the limits of coverage, which is usually between $1,000 to $5,000 as of 2011, according to the Insurance Information Institute. The no-fault medical coverage portion of your homeowners insurance policy typically does not cover medical bills for you or your family.
Considerations
Most mortgage companies require borrowers to carry homeowners insurance for as long as they have a mortgage. It is possible to own a home without carrying homeowners insurance, but the Insurance Information Institute advises maintaining your homeowners policy even if you are not required to do so, due to the large expenses associated with rebuilding a home damaged by a natural disaster such as a tornado. Injuries to yourself or your immediate family members are typically not covered by your homeowners insurance policy, but you may be covered by your health or medical insurance policy.
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