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In 2018, Insurance.com held a survey and asked homeowners what they understood about their homeowners insurance. 48% of homeowners didn’t understand what liability home insurance actually covers, and 24% had no idea how much liability insurance they had. As it turns out, most homeowners have no idea how their homeowners insurance actually even works. An entire ⅓ of homeowners don’t shop around for the best rates, because they don’t know what they’re looking for and what kind of coverage they need.

What is liability coverage?


The personal liability portion of your homeowners insurance covers you in the event of a lawsuit for property damage or injury that you or family members cause to another person, or any damage that could be caused by your pets. It pays for the cost of defending you in court, as well as covering any damages you owe. Liability coverage doesn’t require a deductible to be paid before you can use it, and a standard policy usually has a limit of either $1,000 or $5,000.


What is dwelling coverage?


Sometimes also referred to as Coverage A, your dwelling coverage is the portion of your home insurance that refers to the cost of rebuilding or repairing your home in the event of a disaster such as a fire, wind, rain or other natural disaster. Your standard home insurance doesn’t cover disasters such as floods or earthquakes, so if that is a concern in your area, you’ll need to make sure to purchase separate policies for these!


What is personal property coverage?


Your personal property coverage is what protects the items inside of your home, such as your furniture and other personal belongings of value. In the event of a covered loss, such as a fire or theft, you may be eligible to take advantage of this coverage to help cover the costs to replace these items.


Still have questions?


Homeowners insurance can be confusing, so if you still have questions, give us at City Wide Home Loans a call and we’ll resolve all of your questions!