Homeowners Insurance policies are designed to financially protect your property or home, in the event it is damaged in a covered peril. Standard homeowners insurance policies are all risk unless excluded in the policy. Contents are typically covered on a named peril basis.
There are other types of coverage that are included in a standard homeowners insurance policy, namely:
Coverage A – Dwelling This portion of the homeowners insurance covers repair and rebuild of your homes structure, in the event of covered peril, such as fire, lightning, wind and water. They do NOT include flood. A separate flood insurance policy is needed to cover property damages caused by flood waters. When considering the amount of homeowners coverage, be sure to accurately calculate the cost to rebuild the structure to its’ original condition. Policies do not include the value of the land where the house is built-just the actual structure.
Coverage B – Other Structures on Your Property A standard homeowners policy usually includes the cost to repair and rebuild other structures on the property, such as sheds, detached garages, pool houses, etc. The average coverage amounts for this is 10% of the dwelling coverage, but higher amounts may be purchased. Again, be sure to calculate the actual cost to repair and rebuild the structures to help determine the amount of coverage needed.
Coverage C – Personal Property & Contents This section of the homeowners insurance policy will cover all personal belongings and household items that are destroyed on a named peril occurrence. Completing a home inventory of your belongings is important to help assess the amount of coverage you will need to replace your household items. If you have very valuable items in your home and are under-insured at the time of a peril, you will not be accurately compensated for the loss.
Coverage D – Loss of Use Loss of Use refers to the coverage that protects homeowners at the time the property is uninhabitable. It is also known as “additional living expense” coverage. In other words, when your property has suffered damage due to a covered peril and unsafe to live in, Loss of Use will pay for alternate housing. There are, however, coverage limits so check your policy carefully. You can also choose to add an endorsement to your homeowners’ policy for additional coverage under loss of use.
Coverage E – Personal Liability Protection In a standard homeowners insurance policy, if you are deemed responsible or sued for property damage or bodily injury to other people on your property, or through personal activities, your personal liability protection will cover the claim. There are policy limits, as well as additional coverage that can be purchased. For example, if your child throws a baseball and it hits the car window of a neighbor – you are protected. If a friend slips and falls on the newly mopped kitchen floor of your home – you are covered. Personal liability protection coverage also includes your pets. If your dog bites the mailman – you are covered.
Coverage F – Medical Payments In the event that a visitor is injured on your property, Coverage F, in a standard homeowners policy will cover the medial costs associated with the visitors treatment. The coverage does not take effect if the person decides to sue you for their injury. Again, there are policy limits, as well as options for purchasing additional coverage for medical payments. A few types of injuries that are not covered under this portion of the policy include sexually transmitted diseases, sexual, physical or emotional abuse and injury caused by the use or distribution of controlled substances.