General

• A comprehensive homeowner's insurance policy provides broad protection for homeowners, as opposed to policies that only provide a minimal amount of coverage for personal assets associated with your home. Many homeowners purchase policies that pay for the replacement value of damaged items rather than the actual value of the property. Typically, the homeowner can choose a policy that covers the replacement cost of damaged property, which is the original amount for the item rather than the actual value. This amount only covers the replacement value minus the depreciation. Some comprehensive homeowner's insurance policies may not include contents replacement for damaged items.
  
  

Purpose

• The essential purpose of a comprehensive insurance policy is to protect the homeowner financially against covered losses to the home and its contents. A comprehensive homeowner's insurance policy insures your home's structure and personal property, in addition to providing liability coverage. As a whole, it provides full adequate coverage in the event of any potential damage to the property and certain covered personal items included within the policy.
  
  

Coverage

• A comprehensive insurance policy typically covers the dwelling and its fixtures, attached structures and personal property. Damages that result from such things as fire, windstorms, theft, vandalism and falling objects are usually covered under the policy. The policy covers the insured and other family members residing in the home, including the spouse and children. Additionally, if someone is injured on your property, liability coverage pays for the amount that you are personally responsible to pay. Liability policies cover injuries from accidents to individuals who are not residents of the home, although the coverage is limited to certain types of injuries not excluded under the policy.
  
  

Exclusions

• Although a comprehensive insurance policy provides coverage to protect your home and your personal items, the policy may contain limitations on the amount you're able to receive to replace certain damaged items. However, some homeowner's insurance policies may include additional coverage options that expand the limits of coverage for your home dwelling and personal property. Also, there are certain damages that the homeowner's insurance policy may not cover, such as motorized vehicles and property that's insured by other types of insurance policies. In regards to liability coverage under a homeowner's insurance policy, certain injuries may not be covered under the policy, such as injuries that result from business transactions.
  
  

Note

• Many banks and lenders require individuals to purchase a homeowner's insurance policy before they approve mortgage loans.