Insurance requirements will vary according to the state where the home is located, and most insurance companies will offer standard home insurance packages to cover a majority of common needs. A basic policy may not provide you with all the protection you need for the home, but is intended to meet the most common needs that homeowners may face.
A basic homeowner's package will include coverages for the dwelling, other structures on the property, personal property, liability, and for loss of use of the property. These coverages should be considered the most basic types, each one providing a specific type of protection. Combined, these coverages are available as a standard homeowner's insurance package referred to as HO-2 policy.
This type of policy provides protection for 16 named perils, including fi8re, water damage, wind damage, damage by airplane, and others. It does not provide coverage for earthquakes or floods. These catastrophic events are never included in a standard policy even though having flood insurance or coverage for movements of the earth makes good financial sense no matter where you live.
The liability coverage supplied by a basic home insurance policy covers both property damage that you are responsible for as well as any injuries caused by you or your property. Liability insurance will pay for the injuries and damages, and will also cover the cost of legal fees if you end up being sued because of such injuries or damages.
Personal property includes everything you own. The biggest danger with personal property coverage, though, is that the basic coverage will not typically cover the full value of your property, requiring you to either purchase additional coverage, a secondary policy, or face the possibility of paying the costs out of pocket.
Loss of use coverage will reimburse you for the costs of maintaining your way of life when you cannot do so in the home. This could include staying in temporary lodging, dining out while the kitchen is repaired, or even doing laundry away from home because a tree fell on your wash house. It is vital for a loss of use claim that you save your receipts and document the purchases.