This is the core of homeowners insurance. It covers your dwelling. It includes the nuts and bolts of the home: the ceiling, walls, floors, anything structural. Be sure to understand the difference between the replacement cost coverage and actual cash value coverage. In most cases, replacement cost is the more secure option.

• Replacement Cost: The amount it would cost to replace or rebuild an item of similar quality using materials and goods that are currently available.
• Actual Cash Value: The amount an item is worth based on the replacement cost with depreciation taken into account.

Other Structures coverage is the part of your home insurance policy that pays to repair, replace or rebuild structures on your property that are detached from your actual home and have been damaged by a covered peril. Other structures coverage is usually valued up to 10 percent of the dwelling portion of your home insurance policy automatically, but can be increased.

If you were to pick up your home, flip it and shake it, what falls out counts as your personal property. Whether you own a home or rent an apartment, insurance policies typically include personal property coverage. This type of coverage helps to pay for repair or replace your belongings after a covered loss, such as theft or fire. Most policies include personal property coverage at 70% or more of the structure coverage limit.

Loss of Use covers additional living expenses that come as a result of being unable to use your home as a result of a covered peril. This coverage is a part of every standard policy and helps you pay for everything from fuel expenses to groceries and hotel bills that are additional to what you would normally pay while your home is being repaired as a result of a covered peril.

Personal Liability covers an accident, in or out of your home, that results in bodily injury or property damage that you are held legally responsible. Personal liability will cover the costs of medical bills, as well as your legal defense fees, up to the limit of your liability coverage.

This coverage is designed to pay for medical expenses to others who are accidentally injured on an insured location or by the activities of an insured, resident employee, or an animal owned by or in the care of an insured. In some cases, Medical payments coverage will also extend to injures that occurred away from home.