Home insurance typically comes with a few buckets of main coverage that you can add to if needed. These buckets include:

• Dwelling & Other Structures: This covers the structure of your home (roof, walls, foundation) from damage and any other structures on your property, like a shed, garage, etc. 
• Liability: This covers your liability if something goes wrong, such as if someone is injured on your property, then this covers their medical costs as a result. If you cut down a tree and it damages your neighbors home, this helps cover repair costs. If you’re sued because of this, this coverage also provides you with a legal defense. 
• Personal Property: Your personal belongings are also protected from damage, including clothing, jewelry, electronics, furniture, and more, to a certain extent. For valuable items that exceed the coverage limit, you should consider purchasing additional coverage. 
  
  • Note, there are two types of coverage: actual cash value and replacement cost. A replacement cost policy will cover you for the cost to fully replace items, while actual cash value simply compensates you for their current depreciated value. Replacement cost is a more generous policy, but can be more expensive to maintain. 
  • Read more about personal property insurance here. 
• Loss of Use: If your home is damaged to the point where it’s unlivable, this coverage helps pay for lodging, food, and transport while your home is being repaired/replaced. 

This is what a standard home insurance policy covers, up to certain limits. For example, your dwelling is usually covered up to the rebuild cost of your home, and your personal property is covered for about 20-50% of that.

But homeowners can also further customize their policy by adding riders, which are optional add-on coverage. Each insurance provider offers different variations of home insurance riders, but these can include:

• Scheduled Personal Property: If you have antiques, collectibles, fur, high-value jewelry, or something similar, it makes sense to insure the full value of those items with an added scheduled personal property policy. This policy also offers additional protection, such as if you lose the item. 
• Water Backup: This covers the cost of damage from a backed up sump pump or drain, which is excluded in most home insurance policies. 
• Identity Theft: This is increasing in popularity, as it helps cover the costs to regain your identity after an identity theft, including legal fees, mail fees, and other costs. 
• Business Property: If you run a business out of your home, your standard home insurance policy doesn’t cover you. You’ll need a rider to protect your business-related items in your home. 
• Flood: As mentioned earlier, flooding is a peril that’s almost always excluded from home insurance coverage. If you live in an area prone to flooding, you should consider purchasing a flooding rider to ensure your home and belongings are protected from the damages of flooding (which can be extensive). 

These are just some of the options available to you, but there are even more depending on the insurance provider you go with. Customizing your home insurance policy can give you the peace of mind that your biggest investment is protected as much as possible.

But everything comes with a price tag, so next we’ll explore costs for home insurance coverage in New Mexico.