Many homeowners have been led to believe, largely due to their experience with health insurance, that anything beyond the bare minimum in coverage is unaffordable. Fortunately, when it comes to homeowners insurance, this isn’t the case. Basic coverage in homeowners insurance is actually quite comprehensive.
What is Basic Homeowners Insurance?
When we talk about “basic” homeowners insurance, we’re typically referring to HO-3 policies. These are the most common type of home insurance and provide coverage for a wide variety of perils that can damage your home, other structures on your property, and even your personal belongings.
It’s important not to confuse an HO-3 policy with an HO-1 policy. While HO-1 is sometimes called a “basic form” policy, it offers such limited coverage that most insurers don’t even offer it anymore.
Here are five key coverages that come with most basic homeowners insurance policies:
1. Personal Liability Coverage
Homeowners insurance is known for protecting your house—its structure, roof, windows, and more. But one of the standout features of even the most basic policies is personal liability coverage.
This coverage can help pay for costs if someone gets injured at your home or if you accidentally damage their property. What’s more, personal liability coverage often follows you—meaning you’re protected even if an incident occurs away from your home.
2. Medical Expenses Coverage
Medical expenses coverage is a specific extension of personal liability. Most basic policies include a portion dedicated to covering medical costs for guests who are injured on your property, or even injuries you may cause elsewhere.
Though the coverage limits for medical expenses may not be large, having this in place can help ensure that any injured guest receives necessary medical attention without delay.
3. Loss of Use Coverage
You likely know that homeowners insurance will pay for repairs if, say, a tree branch damages your roof. But did you know most basic policies also cover living expenses if your home becomes uninhabitable due to a covered event?
This means that if a fire or other disaster forces you to temporarily leave your home, your policy can help cover costs like hotel stays, restaurant meals, and even laundry services until you can return.
4. Appliance-Related Water Damage
You may be surprised by how much damage a small leak from an appliance can cause. Even a minor, unnoticed leak from a fridge or dishwasher can warp floors and damage ceilings.
The good news is that most basic homeowners policies cover this kind of water damage. Whether your kitchen or basement requires significant repairs due to appliance-related flooding, your policy can provide the funds needed to restore your home.
5. Replacement Cost Coverage for Personal Property
At Kin, we’re big advocates of replacement cost coverage, so much so that we only offer policies that include it.
Here’s how it works: if your belongings (furniture, appliances, etc.) are damaged by a covered event, replacement cost coverage ensures you can replace them with brand-new items of similar quality.
For example, if your 15-year-old sofa is destroyed in a fire, this coverage will help you buy a new sofa of equivalent quality. In contrast, policies with “actual cash value” coverage would only pay what your old sofa is worth today (which may not be much).
Trust us—you’ll want replacement cost coverage!