Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 25, 2021

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So you’ve got homeowners insurance, and now you’re probably wondering who or what is actually covered?

Good question, and the answer is probably more people than you would think.

A homeowners insurance policy can be thought of as insurance for you and your home, as it insures your home against property damage, and you and your family against liability for injury.

Think of it this way.  If you injure someone while driving your car, your auto insurance will protect you against the liability that arises out of that event and the damage to the property.

If someone is injured while on your property, your homeowners insurance will protect you.

Homeowners coverage provides financial protection against loss due to a natural disaster, theft and accidents. Most standard homeowners policies include four types of coverage: coverage for the structure of the home, coverage for personal property, liability coverage and coverage for additional living expenses. A standard homeowners insurance policy may also cover the costs if you accidentally damage another person’s property or if a visitor is injured in your home.

Unless you own a business, not operated out of your home (for which you can purchase additional insurance on your homeowners policy), there are virtually no other locations or circumstances where you can be liable for injury to another person.

For example, if you were in a restaurant and spilt hot coffee on another person, the restaurant would be held liable in the event of a claim and judgment, not you.

The coverage for the structure of your home means that you will be protected in case your home is damaged due to fire, hurricane, hail, lightning, or other disasters listed on your policy. Standard policies won’t cover damage caused by flood, earthquake, or routine wear and tear.

The coverage for your personal property will cover your furniture, clothes, sports, equipment and other personal items in case they’re stolen or damaged by insured disasters. Liability protection will cover you against lawsuits for bodily injury and property damage that you cause to other people. It also covers damage caused by your pets.

Additional living expenses coverage pays for the additional costs related to living away from home if you cannot live due to damage from an insured disaster.

Therefore, it protects a variety of people who currently live in your home or are in “your care,” but don’t live at the home.

Here are some examples:

• Named Insured – policy holder, often referred to as “you,” in the policy
• Named Insured’s spouse – whether listed on the policy or not
• Any children living in the home (under age 21)
• Full-time students, under 21, who resided in your home just prior to leaving for school
– Take note, if you have a student in college over the age of 21, he/she is not covered under your homeowners insurance policy
• Relatives currently living in your home

Is that true?

We’ve all heard stories of burglars breaking into homes and either hurting themselves in the process or being injured by the homeowner, who then sue and receive damages (money) from the homeowners insurance policy.

Unfortunately, this type of thing is true, and can and has happened.

The cost of your standard homeowners policy depends on a variety of factors, including the type of homeowners insurance coverage you choose, the features of your home and the value of your personal belongings. You may also need to pay an extra cost for additional coverage for increased coverage limit.

Your insurance agent can explain what coverage options are available to you.

Learn more: How to read a homeowners insurance policy.