What Does Your Home Insurance Cover?

a woman holding and reviewing her home insurance policy

Home insurance policies can be overwhelming and a bit confusing. Kevin Clingan of Clingan Insurance Group joined me to discuss some of the things you need to know about homeowner’s insurance and the different types of coverages available.

Dwelling Coverage

A homeowners policy is broken down into four main parts. The first part is your dwelling coverage. The dwelling coverage is the insurance coverage to replace the home structure. If it is blown away by a tornado or if it’s consumed by fire, what will it cost to replace the building is what dwelling coverage takes care of. 


Personal Property Coverage

The second piece is your personal content which is the personal property coverage. If you think about having a home and if you turn the home upside down and shook it, everything that falls out is your personal property. The structure itself is not covered under personal property, but your furniture, your clothes, your silverware, your rugs, all of that stuff that would fall out if you shook it. That’s your personal property coverage.


Liability Coverage

The third area is your liability coverage. We all know that there’s a pretty litigious environment in this world and somebody wants somebody to pay if they get hurt. If that happens on your property, then you’re responsible for that. For example, if someone is bouncing on your trampoline and they break their leg, well, you’re probably going to be liable for that.

That’s going to be hundreds of thousands, 250 or 300 or $500,000 available depending on your policy limits for liability claims.


Medical Coverage

Your fourth area is your medical coverage. If somebody does get hurt on your property, then there is a portion of your policy that covers medical expenses up to that coverage amount and it’ll be a relatively small number.



What You Need to Know About Your Home Insurance Coverages

Now, there is separate structures coverage there that will cover fences and cover sheds to rebuild them. You can have extended liability coverage, but those are the exception, not necessarily the rule, but the four main areas are going to be your dwelling coverage, personal property, liability coverage, and medical coverage, and all of those will always be in the policy as it’s written. 

Within each one of those, you will have varying amounts that you can purchase. Also, if you have a loan, you’re going to have to have homeowners insurance because the lender is going to require it, but even if you’re not required and even if for some reason you’re going to have a home for even just a short period of time, anything can happen at any time. You’re always going to want to make sure you’re covered. 

There is a difference in the dwelling coverage and the purchase price because your dwelling coverage is what’s going to cost to rebuild the structure. You don’t have to rebuild the dirt. The lot is there and you don’t have to replace it.

When you’re rebuilding a house, It’s just like a car – You can have a shell and it costs the same as the next door. But when you start putting in tile versus carpet, when you start putting in granite countertops versus Formica, the cost differences are there, and you want to make sure that your homeowner’s coverage considers all of those unique characteristics of your home to make sure that it can be replaced as you have it built out.


Protect your home, contents, and the people around you. Let’s have a conversation about your real estate goals and I’ll guide you through the process of buying a home in Nashville and Middle Tennessee. Give me a call at (615) 930-0313, schedule a call with me, or send me a message! I love helping people and using my financial and legal background to guide you in finding your dream home!