Insurance policies can be confusing, hard to read and even harder to understand. Instead of listing your coverage in user-friendly terms, most insurance policies use legal jargon and industry-specific language. To make matters worse, insurance policies are also famous for attachments, known as "endorsements" that remove, add or alter coverages found in the main section. So, while it might appear that something is covered at first glance, a subsequent endorsement might actually take that coverage away.

There are several types of insurance policies, covering everything from your car to your life. In this hub, we're going to take a look at your homeowner's policy and learn how to understand the many coverages it provides.

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While coverages vary from state to state, your homeowner policy has some basic components to it, no matter where you're located:

Coverage A - Dwelling

This amount covers the structure itself, from the interior walls outward. Dwelling coverage normally includes any attached structures such as garages, porches and patios or decks.

Coverage B - Other Structures

Other structures includes any unattached structures that are related to the primary function of the residence. This can include detached garages, sheds and pergolas or gazebos. Barns may or may not be covered under this section, depending upon your policy. Many companies require a farm endorsement to be added to include the barn or you may need to schedule the barn separately. Other policies consider the barn to fall under the general category of "other structures" so ask your agent if this is a concern.

Coverage C - Personal Property

This section extends coverage to everything from the interior walls inward. Your furniture, your artwork, books, electronics, carpet, etc. All of your furnishings, including clothes and jewelry fall into this category.

Coverage D - Loss of Use

This section provides coverage for temporary living expenses in the event that you must leave your home so that the repairs can be done. This can cover costs for a hotel, meals, gas and other related expenses that you would not have had if the loss hadn't have occurred.

Coverage E - Personal Liability Coverage

You may also see this referred to as "general liability coverage" although that term is generally reserved for commercial policies. Personal liability is protection for legal expenses and medical bills when you are found to be legally liable for injury or damage to others that occurred on your property. This is third party coverage, meaning that it does not cover your property or injuries to you or other household members. If a guest were to fall and break a bone or a tree limb broke and damaged their car, your personal liability coverage would likely kick in. This coverage also extends to legal expenses in the event that you're sued in civil court for the damage or injury in question.

Coverage F - Medical Payments

Many policies also include a separate section for medical payments. This coverage is typically a small amount, such as $1,000 and is for minor injuries to third parties that occurred on your property.This portion of the policy would pay for things like doctor's visits, xrays and minor treatments.

Now that you know the basic sections, let's look at how some of those coverage will apply to you. In the second part of this series, we're going to examine different policy forms and endorsements and see how they can change the extend of your coverage.