The purpose of insurance is to protect an asset of measurable value from damages and other liabilities. Car insurance, health insurance, life insurance and homeowners insurance are all examples of common insurance policies that most individuals will have because those are the most valuable assets in their lives.

When it comes to your home, you want to make sure that all possibilities and full value are covered by your insurance policy but sometimes it can be hard to tell what you need and don’t need. If you’ve been a homeowner before, you know the process but each policy tends to be different and if you’re looking to purchase your first home, well, all of this might be brand new for you. 

I’ve compiled a brief overview that breaks down the main components of a homeowners insurance policy and what to be on the lookout for. As always, it is best to consult with a professional before deciding but hopefully, this information will help you be a little more prepared.

Even if you’re going to mortgage your home, lenders will still require insurance to protect their risk of lending. Protecting your investment in your home is important and research shows that nearly 60% of American homes are underinsured by an average of 20%.

You can avoid this potentially devastating situation by understanding what your policy covers and what you can claim. Here are the main components of a homeowners insurance policy that should be constant from company to company.




This part of the policy will provide insurance for damage to and destruction of the home itself. In the event of a fire, hurricane, hail, lightning or any other conceivable cause of damage (standard policies will often not cover damage caused by flood, earthquake or normal wear and tear).

Most policies will include coverage of other structures that are not attached to the main dwelling, such as garages or gazebos. The most basic guideline for this part is to make sure you purchase enough coverage to rebuild your home if totally destroyed.


Personal Property


Insuring your personal possessions that are not permanently attached to the structure of your home like furniture, appliances, clothing and any other items of value in your home. When you take a step back to think about how much coverage you should have for your personal property, you need to think about how much you would need to replace all of your belongings.

Depending on the policy, you may be covered in full or a percentage for replacement.


Additional Living Expenses


In the event of a disaster that damages or destroys your home and you are unable to live there, this coverage covers the costs of living away from home while repairs are made or the home is rebuilt. Costs like hotel and meals are covered.




Personal liability coverage that is part of your homeowners insurance policy provides financial protection against lawsuits that may arise as a result of bodily harm or property damage sustained by others on your property. This covers your representation in court and any awards to the plaintiff that are decided on (up to the policy’s limit).

With all that is involved when buying a home, it is important to work with agents that have your best interest and satisfaction at heart. I have been serving homeowners throughout the Valley for nearly 20 years and strive to provide the best overall home buying experience for each one of my clients, whether that’s finding their dream home or helping them understand a Phoenix homeowners insurance policy. Start your search today contacting real estate agent in Country Club East.