Homeowner's Insurance Policy Explanations
A typical homeowner’s insurance policy includes four essential types of coverage:
· Coverage A: Dwelling: The Homeowner Policy's first coverage section protects your house and any attached structures, such as garages, decks or fences. It is a good idea to get a yearly policy review to make sure this amount is up to date.
· Coverage B: Other structures: Coverage of other structures protects buildings on the property that are not attached to the main dwelling; however, it does not protect land or structures used for business purposes. Coverage of other structures is usually limited to 10 percent of the value of the home’s coverage.
· Coverage C: Personal property: Personal property coverage pays (up to policy limits) for all personal property that is owned or used by the policyholder. It covers personal property regardless of the property’s location; personal property off premises is often limited to a certain percentage of your dwelling coverage. For example, loss to contents in your personal vehicle at work would be covered by the personal property component of your homeowners insurance. Personal property coverage also covers property of resident relatives and guests in your home. Note that birds, fish, and other animals are not considered personal property.
· Coverage D: Loss of use: Loss of use coverage pays for losses that are incurred if your home becomes uninhabitable. Benefits of this type of coverage cover living expenses that are incurred if you need to relocate temporarily until your home is repaired. Typically, it is for a maximum of 12 months (or until the home is once again inhabitable, whichever comes first)
· Liability protection: Liability coverage protects you against legal and financial responsibility for any injury or property damage you or anyone insured under your policy may have caused to other people on or away from your property. It can also pay for damage caused by your pets.
Your dog bites the mailman- you're covered. Your son throws a baseball throughn the neighbor's window- you’re covered. Someone falls in your driveway- you’re covered. However, if they destroy your rug or if your son falls in your driveway, you are not covered. The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy.
· Medical Payments: Homeowner's insurance also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. It does not, however, pay the medical bills for your family.
· Personal Property Reimbursement Provision: When you add this endorsement to a policy, the insurance company will settle covered losses to your personal property items based on the cost you incur to repair or replace them, subject to the applicable coverage limits, exclusions and other policy terms and conditions. For example- you pay $500 for a 26 inch HD flat screen TV. Two years from now there is a fire that calls for the TV to be replaced they will give you the money to replace the TV with an item of like kind and quality- meaning a new 26 inch HD flat screen.
· Water/Sewer Back Up: This endorsement will cover damage caused by water backing up through sewers and drains. With this option, the insurer will cover loss to property covered under the dwelling and contents protection caused by water or any other substances which backs up through sewers or drains located within the residence, or overflows from a sump pump or other system designed for the removal of subsurface water.
Your policy will often have limitations on Jewelry, Silverware, Electronic Data Processing, Cameras, Coin or Stamp Collections, Money and Securities, Musical Instruments, Firearms, Sports Equipment, Golf Cart, or Business Property. Please check the declaration page of your policy to see if you have selected the coverage that meets your needs. Also, if you are involved in a home day care or other at home business pursuits, there is often additional coverages needed to protect you in those endeavors.
- Coverage for the dwelling/structure of your home
- Coverage for your personal belongings
- Liability Protection
- Additional living expenses in the event you are temporarily unable to live in your house due to a covered peril/hazard/claim
· Coverage A: Dwelling: The Homeowner Policy's first coverage section protects your house and any attached structures, such as garages, decks or fences. It is a good idea to get a yearly policy review to make sure this amount is up to date.
· Coverage B: Other structures: Coverage of other structures protects buildings on the property that are not attached to the main dwelling; however, it does not protect land or structures used for business purposes. Coverage of other structures is usually limited to 10 percent of the value of the home’s coverage.
· Coverage C: Personal property: Personal property coverage pays (up to policy limits) for all personal property that is owned or used by the policyholder. It covers personal property regardless of the property’s location; personal property off premises is often limited to a certain percentage of your dwelling coverage. For example, loss to contents in your personal vehicle at work would be covered by the personal property component of your homeowners insurance. Personal property coverage also covers property of resident relatives and guests in your home. Note that birds, fish, and other animals are not considered personal property.
· Coverage D: Loss of use: Loss of use coverage pays for losses that are incurred if your home becomes uninhabitable. Benefits of this type of coverage cover living expenses that are incurred if you need to relocate temporarily until your home is repaired. Typically, it is for a maximum of 12 months (or until the home is once again inhabitable, whichever comes first)
· Liability protection: Liability coverage protects you against legal and financial responsibility for any injury or property damage you or anyone insured under your policy may have caused to other people on or away from your property. It can also pay for damage caused by your pets.
Your dog bites the mailman- you're covered. Your son throws a baseball throughn the neighbor's window- you’re covered. Someone falls in your driveway- you’re covered. However, if they destroy your rug or if your son falls in your driveway, you are not covered. The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy.
· Medical Payments: Homeowner's insurance also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. It does not, however, pay the medical bills for your family.
· Personal Property Reimbursement Provision: When you add this endorsement to a policy, the insurance company will settle covered losses to your personal property items based on the cost you incur to repair or replace them, subject to the applicable coverage limits, exclusions and other policy terms and conditions. For example- you pay $500 for a 26 inch HD flat screen TV. Two years from now there is a fire that calls for the TV to be replaced they will give you the money to replace the TV with an item of like kind and quality- meaning a new 26 inch HD flat screen.
· Water/Sewer Back Up: This endorsement will cover damage caused by water backing up through sewers and drains. With this option, the insurer will cover loss to property covered under the dwelling and contents protection caused by water or any other substances which backs up through sewers or drains located within the residence, or overflows from a sump pump or other system designed for the removal of subsurface water.
Your policy will often have limitations on Jewelry, Silverware, Electronic Data Processing, Cameras, Coin or Stamp Collections, Money and Securities, Musical Instruments, Firearms, Sports Equipment, Golf Cart, or Business Property. Please check the declaration page of your policy to see if you have selected the coverage that meets your needs. Also, if you are involved in a home day care or other at home business pursuits, there is often additional coverages needed to protect you in those endeavors.
Any information provided on this website is for informational purposes only. All insurance policies are subject to their specific policy limitations and exclusions. Please check with your current insurance provider for the most accurate information on your insurance coverages, limits, and exclusions.
