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In a recent post, we discussed the importance of understanding insurance for first-time home buyers. Part of this process is knowing what a typical policy covers. A typical policy is divided into property and liability protection. In this post, we’ll discuss property protection.

Bobbie Sage, personal insurance guide for About.com, says property protection is usually broken down into four sections:

Dwelling usually covers your home, attached structures, fixtures such as built-in appliances, plumbing, heating, permanently installed air-conditioning systems and electrical wiring.

Other structures often covers detached structures like garages, storage sheds and fixtures attached to the land like fences, driveways, sidewalks, patios and retaining walls.

Personal property usually covers the contents of your home and other personal items owned by you or family members who live with you. You’ll need to choose protection based on actual cash value or replacement cost. Most home owners insurance policies do not cover motorized vehicles unless they are unlicensed and used only at your home. There are often coverage limits for items like firearms, artwork, business property, electronic data, jewelry and money. You can add coverage through endorsements to your policy.

Loss of use typically covers living expenses over and above your normal living expenses if you cannot live in your home while repairs are made or a government order denies you access.

Remember, all policies have exclusions. Most home owners insurance policies do not cover losses due to floods, mudslides, water damage from sewer backups, damage from war or nuclear hazard, neglect, earthquakes, power failures, seepage, dry rot or vermin. Read your policy carefully and ask your agent if you have any questions.

We’ll cover liability protection in our next post.

About MAX: Our friendly, experienced agents can help answer all your questions abouthomeowners insurance. We also offer home, farm, auto, renters, and other personal lines to help protect the members of the faith-based community. Visit www.faithbasedinsurance.com/contact-us, email wholeness@faithbasedinsurance.com or call us toll-free at (877) 736-5681.

Sage, Bobbie. Understanding Your Home Owners Insurance Policy. About.com. Retrieved January 27, 2012, from http://personalinsure.about.com/cs/homeowners/a/aa013004a.htm.