If you just are in the process of purchasing your first home, what homeowner's insurance actually covers can be a bit of a mystery. Home owner's insurance is designed to cover property damage, personal property loss, personal liability, and added living costs.

#1 Property Damage 

One of the major things that homeowner's insurance is designed to cover is damage to your property. The damage to your property has to happen during a covered event, such as a hurricane or vandalism. It is important to note that some types of property damage are not covered by home owner's insurance, such as damage by earthquakes and floods. If you live somewhere where damage from earthquakes and floods is a possibility, you are going to need to purchase an additional rider to cover your expenses. This is one of the biggest components and cover elements of a home insurance policy.

#2 Personal Property Loss

Second, a home insurance policy is designed to cover when you experience personal property loss as well. When a natural disaster or theft strikes your home, they are not just going to steal or damage the physical items associated with your home. More than likely, a thief or a natural disaster is going to impact your personal property as well.

A home insurance policy is designed to cover you if your personal property is damaged or stolen. Make sure that your personal property protection value is as high as the value of all of your personal property.

#3 Personal Liability

Third, home insurance also provides you with personal liability coverage. If someone is ever hurt or injured on your property, and they need medical care, the personal liability coverage offered by your insurance policy will pay for this damage.

#4 Living Costs

If something ever happens to your home and you are not able to live it in, your insurance will provide you with living costs while your home is being fixed or rebuilt. For example, if a tree branch were to damage your roof, your insurance would pay for a hotel while your roof is being repaired. Or if your home was damaged in a fire, your insurance would pay for lodging and food while your home is being rebuilt.

Home insurance is designed to provide you with funds if your home and personal property are damaged in a covered event. Home insurance will also help pay for a place to live while your home is being repaired after a covered event. Additionally, home insurance will cover you if someone is injured on your property. Home owner's insurance is a necessary expense that helps protect the investment you made into your house.