Understanding Homeowners Insurance

A standard homeowners insurance policy includes four types of coverage:

Coverage for the Structure of your Home and Other Structures:

This part of your policy pays to repair or rebuild your home for damage caused by most common risks. Typically, damage caused by fire, wind, hail, or lightning is covered under this part of the policy. Insurance for flood, earthquake, water and sewer backup damage must be purchased separately.

Most standard policies also cover structures that are detached from your home such as a garage, tool shed or gazebo. Generally, these structures are covered for about 10-20 percent of the amount of insurance you have on the structure of your home.

Your home should be insured on a replacement cost basis which means the cost to rebuild or replace your home. In very few cases, you can insure your home on a market value.

Coverage for your Personal Belongings:

Whether the contents of your house — furniture, clothing and other items — are stolen or destroyed in an insured disaster such as a fire, they are covered under this part of the policy. Most companies provide coverage for about 50-75 percent of the amount of insurance you have on the structure of your home.

Additionally, most homeowner policies limit the amount of coverage for such items as guns, furs, silverware and other valuables.

Coverage for Additional Living Expenses:

If the damage from a fire, storm or other insured peril forces you out of your home, this part of the policy covers the expenses incurred while your home is being rebuilt. Many policies provide coverage for about 20 percent of the insurance on your house or limit coverage to expenses occurred over a twelve month period. Erie's policies do not permit an increase in this coverage.

Liability Protection:

Liability protection covers you against claims or lawsuits for bodily injury or property damage that you or your family members negligently cause to other people or property. It also pays for injury or damage caused by pets.

Your policy also provides medical coverage. In the event a friend or neighbor is injured in your home, he or she can submit the medical bills to your insurance company. Expenses are paid without the injured party filing a liability claim against you.

Liability coverage pays for both the cost of defending you in court and any court awards up to the limit of your policy. This coverage applies anywhere in the world.

Below is list of discounts that you may qualify for: (discounts vary by state)

• Multi-Policy Discount
• Age of Home Discount
• Life Multi-Policy Discount
• Advance Quote Discount