The second type of coverage provided by homeowners insurance is personal property coverage. Most homeowners policies cover contents for 50 percent to 75 percent of the amount of the insurance on a home, depending on the policy. For example, if your home is insured for $200,000, your contents would be insured for $100,000 to $150,000, according to your policy stipulations. Most standard homeowners policies offer limited coverage for certain types of high-value items, such as jewelry, silverware, coins, firearms, furs and watercraft.

Endorsements, Riders And Floaters

If your home’s contents are valued at more than you would receive on a claim under your homeowners policy, you can increase your coverage by purchasing an endorsement, rider or floater.

An endorsement or rider adds more coverage to your homeowners policy for a specific peril or property.
A floater is a separate policy that provides all-risk coverage against anything not specifically excluded. The coverage “floats” with the item wherever it is located, except for circumstances specifically excluded in the policy.

Liability Insurance

Liability insurance is the third major component of your homeowners policy. It provides coverage for claims or lawsuits filed against you by others who are injured or have property damaged as the result of negligent acts by you, your family or your pets. Most standard policies provide $100,000 in coverage, but many insurance professionals recommend a minimum of $300,000. The standard amount of medical payments coverage is either $1,000 or $5,000. Medical payments also cover the expenses of non-family members injured at your home. This type of insurance reimburses them for their medical expenses, regardless of fault. This does not include liability coverage as a result of an automobile accident.

Umbrella Liability Insurance

If you have substantial assets or the potential to earn a high salary, you might want to consider a separate umbrella liability insurance policy. Besides providing liability coverage beyond the limits of your auto and homeowners policies, some umbrella policies cover you against libel, slander, defamation of character, false arrest, mental anguish, wrongful entry, eviction and malicious prosecution, which often are not covered under the liability portion of your regular homeowners policy.

Next: Additional Coverages And Endorsements

Updated Thursday, April 08, 2010

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