Catastrophes, both big and small, can strike at any moment. A tree limb could fall through your roof during a violent storm, or a pipe on your second floor could burst and leak through the kitchen ceiling. The damage from these events can be great—as can the costs—and most people can’t afford to pay out of pocket to fix them. That’s where home insurance comes in.Obtaining homeowners insurance should be a fairly easy process; you simply choose a carrier and a policy based on the factors that are important to you—affordability, customer service, ability to bundle with other policies, financial ratings and convenience, to name a few.Your insurance provider will determine the home insurance premium after evaluating your home’s characteristics, e.g., its location, age, claims history and reconstruction costs. Additionally, your claims history and credit history are factored in as well.After you’ve purchased a policy, there are a few important things to keep top of mind about homeowners insurance.What does my homeowners insurance company cover?In general, a basic homeowner’s insurance policy covers repairs or replacement of your home, other structures on the premises, your personal belonging and temporary living expenses for perils such as:Fire and smokeTornadosHail and windPower surgesTheftYour home insurance policy also provides you with liability protection. This will cover the costs of damages that you (or other people covered under your home insurance policy) are responsible for causing to others, including bodily injury or property damage. For example, if your child sends a baseball through the neighbor’s window, or your cooking at a neighborhood get-together makes everyone sick. It also covers the cost of defending you in a lawsuit if you’re sued for things like libel or slander.What doesn’t my homeowners insurance company cover?Although your homeowners insurance policy is there for you during a wide array of covered events, it’s also very beneficial to know what your insurance won’t pay for, so that you can add optional coverages to your policy at the time of purchase (if necessary and available). Most homeowners policies do not cover damage from the following:Sewer/septic and sump pump backupsFloodsEarthquakesWear and tearNeglectPestsHome maintenanceKnowing what’s not covered can help you customize your homeowners insurance policy further to better fit your particular needs.How much does my insurance company pay for a claim?It’s important to have an idea of how much your insurance company will pay for a claim beforehand so that there are no surprises. One of the most crucial factors in this determination is your deductible.Your deductible is the portion of your claim that you’re required to pay out of pocket, as stated in your policy, before your insurance kicks in. For most claims, the deductible will be a set dollar amount, like $500 or $1,000. However, the deductible for certain coverages may vary, like for wind or hail damage. Often, the deductible for these types of events will be a percentage of your home’s total value—instead of a set amount. For example, if your wind/hail deductible is listed on your policy as one percent of your home’s value, you’d be paying $3,500 out of pocket on a $350,000 home before your insurance coverage kicks in.Another factor in how much your insurance will pay for a claim depends on the coverage you have and the amount you’re covered for. Although it may sometimes vary by state law, there are common coverages found on most all basic homeowners policies.Standard CoverageGenerally, these are the types of coverage that are part of a basic homeowners insurance policy:Dwelling coverage: This covers damage to your home and any attached structures, like a porch. The amount of dwelling coverage on your policy is usually based on the total cost to rebuild your home.Personal property (also called contents coverage): This covers the repair or replacement of certain personal belongings that are damaged or stolen in a covered event. The amount of personal property coverage on your policy is generally 50 to 75 percent of your dwelling coverage amount.Additional living expenses (also called loss of use coverage): This covers certain costs you incur (like lodging and pet boarding) while having to reside outside of your home, due to a covered event. The amount of additional living expenses coverage on your policy is generally 20 percent of your dwelling coverage amount, or it can be total costs incurred during a set time period.Personal liability: This covers the costs of unintentional or “neglectful” injury or damage to another person on your premises, or it sometimes also applies to damage to another person’s property, like a free-standing basketball hoop falling on your neighbor’s car. The amount of liability coverage on your policy is generally $100,000 - $500,000.Other structures: This covers other structures on the premises, like a detached garage or fencing. The amount of other structures coverage on your policy is generally 10 percent of your dwelling coverage amount.Medical Payments: This covers the costs of injury to another person inside of your home, regardless of who may be at fault, like a guest twisting their ankle while stepping down from your porch. It also covers the costs of injury to another person caused by you or a family member outside of your home (for example, your dog biting someone while you are walking through the park). You may be able to choose the amount of coverage on your policy.Then there are coverages that are sometimes required and others that are just “nice-to-haves”.Standard Coverage – for certain areas prone to specific natural disastersSometimes whether coverage is required or not depends on just one important thing—where you live.Flood: Although hurricanes are covered under your standard insurance policy, flooding from hurricanes is not. If you live in a high-risk flood area (according to FEMA guidelines) and your mortgage is backed by the federal government, you’re required to purchase flood insurance. However, one out of three flood claims come from homes in moderate- to low-risk areas—so no matter where you live, flood insurance is something to consider.Windstorm: In hurricane-prone states, wind damage from those types of storms often isn’t covered, so you may want to purchase windstorm coverage for your policy.Mine subsidence: This coverage is specifically for areas of the country that sit over abandoned mines, like in Pennsylvania, Ohio, Indiana or Illinois. If you live in certain at-risk counties (in Illinois or Ohio), you’re required to have mine subsidence coverage on your home insurance policy; this protects you from damage caused by the ground shifting under your home. Some states offer online maps that show whether or not you live in an at-risk area, but in other states, you’ll simply have to the speak to the seller or developer of your home about your potential risk.Optional CoverageThe list of optional coverage to add to your homeowners insurance policy may seem vast, but whether or not you choose to add a specific coverage is purely based on your needs and the needs of your family. Here are a few common examples:Scheduled personal property: This covers jewelry, fine art (like paintings or rugs) or other valuables (like golf equipment or firearms) specifically scheduled on your policy. Your basic home policy has certain limits for these items; however, adding scheduled personal property coverage extends these limits to an amount of your choosing so you’re properly reimbursed in case of a loss.Water backup: This covers any items that are damaged if your sump pump overflows or sewage backs up into your home; it would also cover the cost of cleanup.Earthquake: This covers your personal property in case of an earthquake; it also sometimes covers the cost of living expenses if you need to relocate temporarily due to the damageThese small differences in deductibles and coverages (and their amounts) can make a huge dent in your wallet when it comes time to file a claim, so that’s why it’s so important to review your home insurance policy yearly, to ensure you’re properly protected. SOURCEShttps://www.investopedia.com/insurance/homeowners-insurance-guide/#different-types-of-homeowners-coveragehttps://www.iii.org/article/homeowners-insurance-basicshttps://www.nerdwallet.com/article/insurance/understanding-homeowners-insurancehttps://www.insurance.com/difference-between-medical-payments-liability-home-insurancehttps://www.floodsmart.gov/flood-insurance/requirementshttps://www.valuepenguin.com/mine-subsidence-home-insurancehttps://www.connectbyamfam.com/learning-center/understanding-insurance/types-of-coverage/scheduled-personal-property-coverage/https://www.connectbyamfam.com/learning-center/understanding-insurance/types-of-coverage/water-damage-preparedness-water-backup/