| When it comes to homeowners insurance, you | | | | |
| should understand the different types of | | | | 2. Coverage for Other Structures |
| policies available so that you can make an | | | | |
| informed decision. | | | | Most standard policies also cover detached |
| | | | structures such as garages, storage sheds, |
| Whether this is the first time you are | | | | and fixtures attached to the land such as |
| shopping for a homeowners insurance policy or | | | | fences, driveways, sidewalks, and retaining |
| if you currently have a policy, it is always | | | | walls. These kinds of structures are usually |
| a good idea to be well educated to make sure | | | | covered for about 10% of the amount of |
| you have your home properly and adequately | | | | coverage you have on your home. If you |
| covered. It's also important to know what | | | | believe you need more coverage on these |
| your deductible is. | | | | structures, make sure you talk to your |
| | | | insurance agent. If a detached structure is |
| Standardized HO (homeowners) insurance | | | | used for a business purpose, it is not |
| policies include: | | | | covered under a homeowners insurance policy. |
| | | | |
| HO-A provides extremely limited actual cash | | | | 3. Your Personal Belongings |
| value coverage for your home and contents. | | | | |
| Only the types of damage specifically listed | | | | Items such as furniture, clothing, and sports |
| in the policy are covered. HO-A amended | | | | equipment are covered if they are stolen or |
| policies provide more extensive coverage than | | | | destroyed by insured disasters. Some policies |
| the base HO-A but less coverage than an HO-B. | | | | may have limited coverage for small boats but |
| | | | not motorized vehicles unless they are |
| HO-B provides replacement cost coverage for | | | | unlicensed and only used at your home. Some |
| most types of insurable perils, except for | | | | belongings or items may have limited |
| exclusions. | | | | coverage. These could include artwork, |
| | | | firearms, electronic data and money. Usually |
| HO-C policies provide the most extensive | | | | you have 50% to 70% of the amount of |
| coverage. | | | | insurance you have on the structure of your |
| | | | home. It is very important to conduct a home |
| When you shop for homeowners insurance, it is | | | | inventory to determine if you have enough |
| very important that you know what your policy | | | | coverage to replace these belongings. |
| covers. Your policy is designed to protect | | | | |
| homeowners from insurable perils. These | | | | Costly items such as silverware, jewelry, and |
| perils can include fire, theft, hurricanes | | | | furs are covered but there are usually dollar |
| and several other events. Your individual | | | | limits. Your coverage even includes |
| policy is determined by named perils and | | | | "accidental disappearance," meaning if you |
| exclusions. Policies can differ from | | | | lose the item it is covered by your policy. |
| homeowner to homeowner. With your agent's | | | | However, there is no deductible. To insure |
| help, you can determine how much coverage you | | | | expensive belongings for their full limits |
| and your family need. | | | | you need to buy a special personal property |
| | | | endorsement. |
| To receive full payment (minus your | | | | |
| deductible) for a partial loss, you must | | | | Trees, plants and shrubs are also covered |
| insure your house for at least 80% of its | | | | under the Personal Belongings part of your |
| replacement cost. If you insure for less, the | | | | policy as long as they were damaged by |
| insurance company will only pay for part of | | | | insurable perils. They are not covered if the |
| the expense of a partial loss. If your home | | | | damage occurred from wind or disease. The |
| is destroyed and you only have actual cash | | | | coverage is usually 5% of the insurance on |
| value coverage, you may not be able to | | | | your home. |
| completely rebuild with the claim payment you | | | | |
| receive. | | | | Your policy also includes off-premise |
| | | | coverage anywhere in the world. Sometimes the |
| With any policy there are exclusions. Your | | | | limit is 10% of the amount on the policy. |
| policy typically does not cover injuries to | | | | |
| animals or damage to motor vehicles or | | | | Your policy includes up to $500.00 of |
| aircraft. You also are usually not covered | | | | coverage for unauthorized use of your credit |
| for losses due to floods, mudslides, water | | | | cards. |
| damage from sewer backups, damage from war or | | | | |
| nuclear hazards, neglect, earthquakes, power | | | | 4. Additional Living Expenses (Or Loss of |
| failures, seepage, dry rot or vermin. | | | | Use) |
| | | | |
| Homeowners insurance policies have different | | | | This part of your policy covers any |
| covered perils and exclusions. Check your | | | | additional expenses you may have above and |
| policy carefully so you understand the kinds | | | | beyond your normal living expenses if you |
| and extent of coverage you have. | | | | cannot live in your home due to damage caused |
| | | | by insurable perils. This means hotel costs, |
| Five Key Home Insurance Coverage Types | | | | meals, and other living expenses are covered |
| | | | while your home is being repaired or rebuilt. |
| The rates you pay for your standard | | | | The amount available to pay for these |
| homeowners insurance policy includes the | | | | expenses is usually equal to 20% of the |
| following essential types of coverage: | | | | insurance on your house. If you rent part of |
| | | | your home, the loss of income will be |
| Coverage for the structure of your home. | | | | reimbursed. Policies differ company to |
| | | | company. Make sure you know what is covered. |
| Coverage for other structures. | | | | This part of your insurance policy is to help |
| | | | you maintain a "normal standard of living." |
| Coverage for your personal belongings. | | | | |
| | | | 5. Liability Protection |
| Additional living expenses (ALE) also known | | | | |
| as loss of use. | | | | Liability protection provides personal |
| | | | liability coverage against lawsuits for |
| Liability protection. | | | | bodily injuries or property damage that you |
| | | | or other members of the family who live in |
| 1. The Structure of Your Home | | | | the home cause others on your property. It |
| | | | also covers any damage or injury your pet may |
| Coverage for the structure of your house is | | | | cause. This part of your policy includes |
| the part of your policy that includes repairs | | | | no-fault medical coverage so medical expenses |
| or rebuilding if your home (dwelling) was | | | | are paid with no liability claim filed |
| damaged by fire, hurricane, hail, lightning | | | | against you. The cost of defending you in |
| or other disasters listed in your policy. | | | | court and court awards are covered, up to the |
| Your "dwelling" typically includes your | | | | limit of your policy. This coverage covers |
| house, attached structures and fixtures in | | | | you, your family members, or your pets |
| your house such as built-in appliances, | | | | anywhere in the world. |
| plumbing, wiring, heating systems, and | | | | |
| permanently installed air-conditioning | | | | Home insurance experts highly recommend that |
| systems. This coverage does not include | | | | you buy at least $300,000 worth of |
| damage caused by floods, earthquakes or | | | | protection. You can also buy an umbrella or |
| routine wear and tear. When you buy your | | | | excess liability policy. This kind of policy |
| homeowners insurance, it is very important | | | | covers you for slander or libel claims. These |
| that you purchase enough to rebuild your | | | | policies cost between $200 to $300 for every |
| home. | | | | $1 million of additional coverage. |