Property protection covers your property- home, other structures or possessions- if they are lost or damaged due to perils such as lightning, fire or wind (All policies will tell you which perils are covered). Most policies are divided into 4 main sections:
- Coverage A: The home (dwelling)
- Coverage B: Detached Structures
- Coverage C: Contents (personal property)
- Coverage D: Additional living expenses
Your insurance agent will help you decide on an amount of insurance to purchase to cover the house.
In some cases, the insurance company requires that you purchase enough insurance (an amount equal to at least 80 percent of the value of your property) to get replacement cost coverage. The insurance value is different from the appraised value of the house; it is what it would cost to repair or replace a property and not what the market thinks is the value of the home.
Liability insurance is called third-party coverage since it pays other people, not you. A typical homeowner’s policy provides $100,000 of liability coverage, although the amount can be increased or decreased. This coverage applies if you, any relative or dependent person in your care who lives in your home or your domestic pets become legally liable for injuring someone else or damaging their property.
In addition to liability insurance, your policy will include medical payment coverage that pays the medical costs of those hurt on your property regardless of liability. It is usually limited to $1,000 to $10,000.