Homeowners insurance provides protection from property damage, loss, theft and liability claims should anyone become injured on your property.
Most homeowner insurance policies cover your home’s structure, such as walls and fences. Some policies even extend coverage to landscaping features like pools or trampolines in your backyard – however most policies don’t cover earthquake or flood losses.
Dwelling Coverage
Dwelling coverage is one of the cornerstones of any standard homeowners policy and serves to cover rebuild costs should your home be destroyed by an insured peril. Also referred to as “Coverage A,” dwelling coverage typically protects both structures on your property – like garages and sheds – as well as materials being used for expansion or repair such as lumber being added onto an addition room.
Dwelling insurance limits should cover at least the mortgage payment and provide coverage of at least its replacement cost. Because your home’s value can change over time, policy limits should be reviewed yearly – particularly after significant improvements or additions such as installing hardwood floors or renovating your kitchen – in order to remain accurate and sufficient coverage limits are set accordingly.
A standard homeowner policy typically won’t cover damages caused by flooding, earthquakes, sewer backups or lack of maintenance; however, additional flood and earthquake policies are available. Furthermore, damage from windstorm and hail is generally excluded unless an endorsement specifically protects against those risks.
Extended dwelling coverage offers you additional coverage against such perils as hurricanes and wildfires; though an extra premium will usually apply, this type of policy could save money in the long run.
Tornadoes, earth movement and war are not covered under your dwelling policy, however you may purchase additional coverage through endorsements for these risks as well as to extend sewage and water lines into underground vaults. Many insurers also provide service line damage coverage which pays to repair or replace damaged lines, telephone networks and cable wires – speak to both your agent and insurer about these options when considering coverage options for replacement or repairs.
Personal Property Coverage
Homeowners insurance typically provides personal property coverage up to a certain limit. This limit typically corresponds with a percentage of dwelling coverage; on an HO-3 policy it typically falls at 50% of dwelling coverage, although other policy forms may offer different amounts. It is essential that you assess whether this standard coverage is sufficient if you own expensive items such as jewelry, cash and valuables that need protection; additionally floater policies often offer greater limits or can even add sublimits depending on specific categories like jewelry and electronics belongings.
Most homeowners policies offer additional living expense coverage, which provides for temporary housing expenses should your house become damaged by an insured peril and you cannot reside there anymore. Often this coverage amounts to 20 percent of your dwelling coverage limit.
As part of your insurance needs analysis, consider what it would cost to replace all of your belongings if your house were destroyed, including clothing, furniture, electronics and dishes. Once that number has been calculated, use tools like the Home Inventory app for easy valuation.
As part of your overall financial plan, it is also important to take a careful inventory of how much money is in savings and investment accounts that could potentially be used to buy new things if necessary. Furthermore, take note of your credit history as well as the size and location of your property. Your neighborhood and crime rate, pool ownership or trampolines could all have an effect on the cost of home insurance premiums. When considering policies with guaranteed replacement cost and extended replacement cost coverage options for homeowners policies. These policies tend to offer higher payouts for rebuilding costs than actual cash value policies, though they may cost more and not be available from all insurers. If interested, speak to your insurance producer for further guidance.
Additional Living Expenses Coverage
No matter the circumstances of an unexpected fire or hurricane evacuation, rebuilding can take months. While waiting, additional living expenses (ALE) coverage provides you with relief by covering extra living costs while your house is being rebuilt or repaired; typically this covers expenses such as hotel or rental house charges, dining out at higher than usual prices and extra automobile mileage costs.
ALE limits are often set as a percentage of your dwelling limit; however, some policies offer higher amounts as an add-on or upgrade option to cover higher-risk areas where wildfires, natural disasters or other hazards pose greater threats. This coverage may prove particularly useful in high-risk regions where wildfires, natural disasters or other risks pose additional threats.
Bear in mind that ALE is designed to help maintain your standard of living rather than improve it, which means they may not cover certain expenses such as mortgage payments and utilities bills. Therefore, it’s advisable to reach out to both your insurer and insurance adjuster to receive guidelines as to which expenses qualify and how much can be spent on each one.
Your homeowner policy may provide limited protection for personal property that’s not attached to your home, such as jewelry and artwork. If these types of items are part of your collection, consider purchasing an additional personal property endorsement to ensure they’re adequately covered.
Medical payments coverage, which is usually included with homeowners insurance policies, may also be worth considering. It covers reasonable and necessary medical costs incurred as the result of someone being injured on your property regardless of its cause. When filing a claim under this coverage, be sure to document injuries sustained and submit receipts for medical bills incurred as evidence. Typically 10% of your dwelling limit (but higher limits can sometimes apply). Get in touch with us for more details about specific coverage offered by our home policies!
Liability Coverage
Liability coverage in your homeowners policy provides protection in case of accidents on your property, such as guests tripping over objects on your porch or being injured by your pet. A typical homeowners insurance policy comes with at least $100,000 of liability protection; you may be able to increase that limit for an additional premium payment. For items of greater value like jewelry and art, an umbrella or excess liability policy might provide extra peace of mind.
Dwelling coverage provides funds to repair or rebuild your house if it is damaged by fire, wind, hail or other perils covered by your policy, including detached garages, barns or sheds on your property. Homeowners insurance also protects personal items like furniture, clothing and sports equipment within your home as well as personal liability resulting from disaster. It’s wise to conduct a home inventory before purchasing enough coverage to fully replace all possessions in case of disaster.
Homeowners insurance not only covers repairs or replacement expenses, but it may also reimburse additional living expenses should an event cause you to have to temporarily reside somewhere else while your home is repaired or rebuilt. Coverage typically has time limits and amounts; to learn more please speak to a representative from your insurance provider about what might apply in your situation.
Most policies offer medical payments coverage, which covers reasonable medical expenses incurred as the result of being accidentally injured on your property. This coverage should supplement your liability coverage for most accidents; for more serious injuries it may be worthwhile investing in additional health or accident policies separately.
