Understanding Homeowners Insurance
The following are brief definitions of each separate coverage on a Homeowner's Policy
The following are brief definitions of each separate coverage on a Homeowner's Policy
- Coverage A (The Structure of Your Home) - This part of your policy pays to repair or rebuild your home if it is damaged or destroyed by fire, tornado, hail, lightning or other disaster listed in your policy. It will not pay for damage caused by a flood, earthquake (unless endorsement is purchased), or routine wear and tear. When purchasing coverage for the structure of your home, it is important to buy enough to rebuild your home. Most agencies will ask for information (sq. ft, flooring, age, siding) on your home and complete a replacement cost estimator to figure out adiquate coverage for your home.
- Coverage B (Other Structures) - Most standard policies also cover structures that are detached from your home such as a garage, tool shed, or gazebo. Generally, these structures are covered for about 10% of the amount of insurance you have on the structure of your home. If you need more coverage, talk to your Agent about purchasing more insurance, it is usually added as an endorsement to your policy.
- Coverage C (Personal Belongings) - Your furniture, clothes, sports equipment, and other personal items are covered if they are stolen or destoyed by a fire, tornado, or other insured disaster. Most companies will make this a percentage of your dwelling coverage (i.e. 70% of Coverage A). We stongly encourage you to conduct a home inventory to determine the amount of coverage needed. This part of your policy inclueds off-premises coverage. This means, under most circumstances, your belongings are covered anywhere in the world. We also recommend adding Personal Property Replacement Cost so that your Coverage C is covered for replacement cost.
- Coverage D (Additional Living Expense) - This pays the additional costs of living away from home if you can't live there due to damage from a fire, storm, or other insured disaster. It covers hotel bills, restaurant meals, and other living expenses incurred while your home is being rebuilt. Althought the coverage provided under policies vary, it is also a percentage of your coverage A limit. You can increase this coverage, for an additional premium on your policy. If you rent out part of your house, this coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.
- Coverage E (Liability Protection) - Liability covers you against lawsuits for bodily injury of property damage that you or resident family members are found to be legally liable for. It also pays for damage caused by your pets. So, if your son, daughter, or dog accidentally ruins your neighbor's expensive rug, you are covered. However, if they destroy your rug 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. You are also covered, not just in your home, but anywhere in the world. (Any punitive damages awarded are not covered.)
- Coverage F (Medical Payments to others) - Your policy 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. Medical Payments does not, however, pay the medical bills for your family or pet.
- Extra Endorsements - Many companies have many endorsements that may be added to your policy. You can add watercraft liability, ATV liability, incidental business coverage, personal injury, identity theft coverage, and many more things to each homeowner policy, it just depends on the company you are dealing with. You are also able, with some of our companies, to add Package Endorsements that include many extra coverages for a small fee per year.
- Personal Property - Scheduled - Your Homeowner's Policy may be endorsed to provide specific coverage for personal property on a scheduled or itemized basis. Scheduling the coverage increases the perils for which an item is insured. (things that are usually scheduled = jewlery, valuable arts, guns, etc).
- Many Many Extra Coverages depending on the company that you are quoted with these extra coverages vary.
