Homeowners insurance is a package policy and provides financial protection against disasters. A basic (or standard) policy insures the home itself and the things you keep in it. This means that it covers both damage to your property and your liability (or legal responsibility) for any injuries or property damage you or members of your family cause to other people. This may also include damage caused by your pets.

Disasters are covered, but there are exceptions:

• Floods
• Earthquakes
• Poor maintenance

You must buy separate policies for both flood and for earthquake coverage. Maintenance related issues are the homeowner's responsibility.

You may be wondering... "How much homeowners insurance do I need?"

That is a great question and one that is often overlooked. The simple answer is, you need enough insurance to cover the following:

• The structure of your home - you need enough to cover the cost of rebuilding your home at current construction costs (don't include the cost of the land and don't estimate based on the price you paid for your home). For a quick estimate of the amount of insurance you need, multiply the total square footage of your home by local building costs per square foot.
• The contents of your home - (personal belongings)
• The cost of additional living expenses - (if your home is damaged in such a way that you have to live somewhere else during repairs)
• Your liability to others

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