Your home may be your biggest investment, so it is important to properly protect it. Homeowner’s insurance offers homeowners a level of protection against unexpected loss of property and personal belongings. In addition, if your home is purchased using a mortgage, the lender generally requires that your home is properly insured as a condition of the mortgage.
Here are the basic parts to a homeowners policy:
Coverage A: Dwelling Property
Dwelling coverage protects your house and any structures attached to your home, like the garage and the screened porch. Within this coverage is piece of mind that should your home be damaged or completely lost it will be built back to its original condition using the same or like materials.
Coverage B: Other Structures
Non-attached structures on your property — like storage sheds, guest houses, gazebos and pool houses — are covered under other structures coverage. Typically this is 10% of “coverage A”. This amount can be increased or decreased should you have this need.
Coverage C: Personal Property
This part of your homeowner’s policy protects your belongings such as your clothing, furniture, tools, etc., but there are a few limitations you should know about. There are restrictions on the amount a standard homeowner’s policy will pay on some belongings jewelry, furs, firearms, money, securities, valuable artwork, etc. Always remember to schedule these items individually on your policy to ensure they will be protected
Coverage D: Loss of Use
All homeowners policies provide essentially the same coverage for loss of use. Loss of use provides protection for such things as additional living expenses after a loss. (For example: this will pay for accommodations if your home is unable to be occupied due to a loss)
Coverage E: Personal Liability
This coverage protects you against claims arising from accidents to others on property that you own or rent. With a few exceptions, such as auto or boating accidents, it is an all-purpose liability policy that follows you wherever you go.
Coverage F: Medical Payments to Others
Medical payments insurance is homeowner’s coverage that compensates others who sustain an injury while on your property, or whom you injure accidentally.