A basic homeowners insurance plan consists of four major types of coverage. These include: Home structure, coverage for personal belongings, liability protection, and living expenses in the event you cannot reside in your home as a result of an insured disaster.

Earthquakes and floods are not covered by standard insurance plans. To insure your home against these natural disasters, you will need to purchase a separate insurance policy. However, here is a list of catastrophes that are covered by homeowners insurance: fire, lightening, theft, vandalism, overflow of water from plumbing, just to name a few. You need to think ahead when purchasing homeowners insurance. When assessing the amount of coverage you should buy, think about how much it would cost to reconstruct your home if it were completely demolished.

All of your personal belonging are covered if they are stolen or ruined by an insured disaster. A majority of insurance companies will offer coverage for 50% to 70% of the sum of insurance you have placed on your home. Between $1,000 to $2,000 is allotted for expensive items such as furs and jewelry. Up to $500 coverage is also allowed for unauthorized use of credit cards.

Liability protection shields you against legal action for bodily harm or estate damage that was caused by you or family members. This part of the policy pays the expense of your defense in a court of law, and is supported throughout the world.

If you are unable to live in your home due to damage from an insured disaster, most homeowners insurance policies will pay for the additional expenses such as hotel fees and restaurant tabs, while your house is being reconstructed. However, coverage for these extra costs vary with each insurance company.