If you own your own home, or are paying a mortgage on it, you probably already have a homeowner’s insurance policy, but do you know what it really covers? Many homeowners have home insurance questions and they don’t even know it. If you cannot name the items covered by your homeowner’s insurance, you should take some time to learn more about this type of insurance coverage.

Homeowner’s insurance covers two basic things: liability and damage. Liability coverage protects you from potential lawsuits that could come if someone is injured on your property. For example, if you are hosting a party and someone falls in your home and breaks his arm, you may face a lawsuit. Liability coverage will pay the legal costs and, potentially, the medical bills in this type of situation.

Most homeowners think of the other part of their coverage when they think of their homeowner’s insurance, and this is the part that protects the property itself. One of the most common home insurance questions that insurance agents hear is, “My home suffered damage from such and such event. Is it covered?” The average homeowner’s policy covers the home’s structure, the buildings around the home, and the personal property inside the home. These items are protected from natural disasters like storms or ice, fire that is not deliberately caused, theft, and vandalism. Floods and earthquakes are usually excluded types of damage, but policies to cover these events can be purchased separately.

The items inside the home are covered, but one home insurance question that you need to ask your insurance agent is whether they are covered for their replacement cost or actual value. Replacement cost would be the total cost to replace the item. If, for instance, your 20-year-old sofa were lost in a fire, you would have to pay quite a bit more than the sofa was worth to get a new one. Replacement cost would give you enough to buy a new sofa. Actual value coverage would only give you what the sofa is worth with depreciation factored in, and in this example, you would not get much.

Many homeowner’s policies also cover equipment failure in the home. For instance, if a pipe were to burst and flood your home, causing extensive damage, your homeowner’s insurance policy will help pay for the damage. However, most policies exclude failure that is caused by negligence on the homeowner’s part. It is important that you keep up your home so that you can make claims with your insurance company if something fails down the road.

These are the basics of homeowner’s insurance. If you have other home insurance questions, it would be a good idea to talk to an insurance agent. Be sure you know what you are getting before you buy any homeowner’s insurance policy.

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