Homeowners Insurance

Insurance is something most people don't even want to think about until they need it the most. But, understanding what is and isn't covered in your homeowners insurance policy can mean the difference of being able to rebuild your home and replace your personal belongings. Homeowners need to do annual insurance policy "check ups" to make sure they keep up with local building costs, home remodeling and inventories of their personal belongings.

The typical homeowners insurance policy covers damage resulting from fire, windstorm, hail, water damage (excluding flooding), riots and explosion as well as other causes of loss, such as theft and the extra cost of living elsewhere which the structure is being repaired or rebuilt.

Your policy also covers your legal liability (up to policy limits) if you, members of your family or even your pets hurt other people or their property, not just in your house, but away from it, as well.

The Structure of Your Home

Three ways to insure the structure of your home:

Replacement Cost. Insurance that pays the policyholder the cost of replacing the damaged property without deduction for depreciation, but limited to a maximum dollar amount.

Extended Replacement Cost. An extended replacement cost policy, one that covers costs up to a certain percentage over the limit (usually 20%). This gives you protection against such things as a sudden increase in construction costs.

Actual Cash Value. This covers the cost to replace your home minus depreciation costs for age and use. For example, if the life expectancy of your roof is 20 years and your roof is 15 years old, the cost to replace it in today's marketplace is going to be much higher than its actual cash value.

Homeowners Insurance Coverage's 

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A. Coverage A – Dwelling. Dwelling coverage is the component of the homeowners policy that covers the repairing or rebuilding of your home in the event that it’s damaged or destroyed by a covered peril, such as fire, lightening, wind, or hail.

B. Coverage B – Other Structures.  Other structures coverage's is the component of the policy that covers the repairing or rebuilding of additional structures on your property besides your home in the event it is damaged or destroyed by a covered peril. Examples of other structures include a shed or detached garage.

C. Coverage C – Personal Property. Personal contents or personal property coverage refers to the portion of the policy that covers the costs of replacing your covered belongings within your home in the even they are damaged or destroyed in a covered peril.

D. Coverage D – Loss of Use. The portion of your standard home insurance policy that provides coverage for other living arrangements while your primary residence is being repaired or rebuilt is call loss of use coverage. This coverage reimburses you for living expenses, such as hotel costs and food while your home is uninhabitable.

E. Coverage E – Personal Liability Protection. To protect you and your covered family members from lawsuits brought against you by a third party. Examples of situations where personal liability protection comes to the rescue include being sued when your dog bites a friend or a delivery worker falls on your steps due to a faulty hand railing.

F. Coverage F – Medical Payments. In the event that someone is injured in your home or on your property but doesn’t sue, the medical payments portion of your home insurance policy will cover injuries sustained. This coverage component differs from the personal liability protection component in that medical payments coverage picks up when the injured party doesn’t sue, whereby the personal liability protection portion kicks in when the injured party sues you. There are coverage limits to the medical payments component, but homeowners can take out more coverage if desired.

Additional Property Coverage's

In addition to these six main coverage's described above, a standard homeowners insurance policy contains additional property coverage's. These include debris removal, property removal, fire department fees, credit card theft charges, identity theft charges, building collapse, and damage to trees and shrubs.

Endorsement

For additional protection, endorsements can be added to a standard homeowners insurance policy. Examples of endorsement add-ons include guaranteed replacement cost coverage, extended replacement cost coverage, broadened theft protection coverage, secondary residence coverage, inflation guard coverage, expanded credit card theft and forgery coverage.

Exclusions

Typically, claims made from floods, earthquakes, war, and termites are excluded from a standard homeowners insurance policy, but special insurance riders can be added to ensure the homeowner is covered for these events.