Homeowners insurance provides financial security in case of unexpected events like fire. To determine what coverage is appropriate, it’s essential to understand all available policy types, limits and deductibles.
Policies generally cover damage to your house and belongings as well as injuries sustained on your property, along with liability coverage if anyone gets hurt on it. Take our survey now to get personalized quotes and select the ideal homeowners policy for yourself!
Liability Coverage
Homeowners insurance provides essential protection to both homeowners and their families in case of natural disasters, fire or other accidents that cause damage to the house or its possessions. Covering such damages, repair/replace costs may be covered, along with medical costs for any one injured on the property, as well as covering temporary uninhabited periods during repairs being made if required and protecting you against lawsuit costs if someone gets hurt on your property.
Most home policies provide at least $100,000 of personal liability protection, which may be enough to shield your assets in case of serious injury, but many people require more. Talk with your agent about adding an umbrella policy for added coverage or purchasing a separate personal-liability policy for added peace of mind.
Your home insurance provides additional protection from earthquake and wind-related damage. There are various kinds of home policies, but HO-3 policies (also called special form policies) tend to offer comprehensive protection – these types are often required by mortgage lenders and provide either actual cash value or replacement-cost coverage options. Make sure it contains at least $100,000 dwelling coverage and $50,000 other structures coverage before purchasing your policy.
Most standard home policies contain specific limits for personal property coverage; items like jewelry, silverware and collectibles may not qualify. If you own expensive items that might fall outside those limits, speak to your agent about obtaining additional coverage in the form of either a personal-property floater or endorsement with higher limits or identity theft coverage as this may reimburse for money lost from unauthorized charges on credit or bank accounts.
Dwelling Coverage
Homeowners insurance offers multiple coverage types, but dwelling coverage should form the core of every policy. Dwelling coverage protects the structure of your home – its structure, appliances and features such as its roof and walls as well as any attached structures like porches or garages attached to the dwelling; fences or sheds not attached are typically covered under other structures coverage on homeowners policies.
Dwelling coverage typically has both a limit and deductible amount that you agree to pay out-of-pocket before insurers start covering damage. Your limits can be tailored specifically to your property and losses that occur as needed – for instance if an earthquake or windstorm damage your home, raising its limits to account for these potential losses may be necessary.
As part of your homeowners insurance search, dwelling coverage should be your starting point – as it determines the maximum amount your insurer will cover when filing a claim and serves as a reference point when calculating other coverages on your policy, such as personal property or loss of use.
Your dwelling coverage limits should also be reviewed annually. Construction and labor costs can rise sharply after natural disasters or other events affecting high-risk areas. Many insurance companies provide extended replacement cost coverage and guaranteed replacement cost coverage that help offset these rising construction costs, with limits such as 25%-50% increased on either. Dwelling coverage can also provide essential protection for properties that don’t need full homeowners policies like hunting cabins and beach vacation properties.
Other Structures Coverage
Other Structures Coverage, commonly referred to as “Coverage B,” provides protection for structures on your property that are separate and distinct from your dwelling, such as fences, sheds, detached garages and treehouses. Other Structures coverage generally provides coverage against hailstorms, fire and theft in addition to general wear-and-tear damage.
Your other structures should typically receive up to 10% of the amount of dwelling coverage in case of loss, however if their value exceeds this figure it’s wise to contact your agent about raising limits or adding riders as necessary.
Do keep in mind, however, that other structures on your property aren’t covered for anything you store within them; that would fall under personal property coverage instead. In addition, if any structures on your property are used for business purposes — like an in-law apartment or rental cabin — it’s essential that you speak to your agent about adding a rider to your policy to provide proper coverage.
Since life changes and renovations can alter your coverage needs, it’s wise to regularly review other structures coverage as well as individual structures on your property. When reviewing, make sure that replacement cost, construction materials and unique features are considered when reviewing. Having this information at your fingertips allows you to ensure your home is adequately protected against those risks most likely to threaten it. For more information regarding homeowners insurance or other structures coverage contact us now; we would be more than happy to assist!
Personal Property Coverage
Personal property coverage (sometimes referred to as contents coverage) provides protection for your possessions against damage and theft. It’s included in most homeowners and renters policies and typically covers up to the total limits of your policy.
An inventory is an effective way of estimating how much personal property coverage you require. An inventory should include your possessions, their locations and values – this list could come in handy should an unexpected claim need to be filed as it will allow you to ensure enough coverage is in place to replace everything that might be damaged in an incident.
Most standard homeowner and renters policies cover your belongings for damage caused by “named perils,” such as fire, theft, vandalism and wind. For additional protection for your items consider getting “open perils” coverage – this adds onto an existing policy with additional coverage for high-ticket items that might otherwise go uncovered under its standard policy.
Standard homeowners policies usually cover personal property to its actual cash value in case it’s lost; that is, what would you receive if you sold the item today. Replacement cost value coverage pays out if something like it is destroyed but typically has higher premiums attached.
Some standard policies place limits on how much they will cover for certain personal items, like jewelry and computers. If your items have high values, consider scheduling them which requires documentation or appraisal; additional coverage could also be purchased via endorsement or separate policy.
Loss of Use Coverage
Home insurance can help cover property damages caused by natural disasters and other incidents that render your house inhabitable, so loss of use coverage should be part of any plan for uninhabitability. Loss of use coverage reimburses extra living expenses such as hotel bills/rent, food expenses and mileage to get to work should driving further be required than usual to reach work.
Rebuilding or repairing your home after an incident could take weeks or even months; having this coverage in place could provide peace of mind while waiting.
Loss of Use coverage typically covers a percentage of your dwelling limit as shown on the declaration page, though you can increase it for an additional fee. Select an amount sufficient for your needs and budget; if you have children or pets, extra costs should be factored into any decision-making.
Before purchasing loss of use coverage, it is crucial that you understand its limitations and how they operate, keeping in mind that this coverage doesn’t cover mortgage or rental payments. Consider whether nearby family can provide temporary housing; also prepare to cover living expenses during repairs while your home is under renovations. If any questions arise regarding its limits or coverage options, talk with your agent.
