Homeowners Insurance Policy Must-knows

Understanding you Homeowner’s Insurance Policy and knowing what you are getting in purchasing one is very important. You may choose to buy insurance over the internet or request for an insurance quote from your local agent.

Protecting your home against certain accidents is what a Home Owner’s Insurance Policy is all about. Unless specified, there is a deductible when filing a home insurance claim. There are also certain exclusions in a policy. Ask your agent or insurance company about those that may apply.

There are two parts in a typical home owners insurance policy.

Part I: Home Insurance Property Protection

Part II: Home Insurance Liability Protection

The first part (Home Insurance Property Protection) is usually on the Home Insurance Declaration page. It is divided into sections which are as follows:

  1. Dwelling
  2. Other Structures
  3. Personal Property
  4. Loss of Use

Coverage A. Dwelling covers your house, built-in appliances and other fixtures, attached structures, heating, electrical wiring, permanently installed air conditioning systems and the like.

Coverage B. Other Structures covers detached structures like storage sheds, garages, driveways, sidewalks, patio, retaining walls and those attached to the land including fences and gardening. Personal home owners insurance does not cover those used for business purposes.

Coverage C. Personal Property as it suggests cover the personal contents of your home and other personal items of those living in it. There is a limited coverage from home insurance policies for small boats but most do not cover motorized vehicles unless used for domestic purposes and are unlicensed. Adding endorsement to your policy may provide extra coverage for some items like jewelry, electronic data, money and business property which usually have a limited coverage.
Coverage D. Loss of use covers extra living expenses that go beyond the normal while your home is under repair or if government order denies you access into it.

Additional Property Coverages can also be provided by home owners’ insurance policies like fire department service charges, property and debris removal, theft or illegal use of transfer or credit cares, glass breakage and collapsed buildings.

You can also add Endorsements to your home owner insurance policy for an extra cost for additional protection. Examples of these are as follows:

Guaranteed replacement cost coverage pays the costs of rebuilding your home as long as requirements of your home insurance policy are met.

Extended replacement cost coverage usually adds a 20-25% extended limit for reconstruction costs.

Inflation Guard helps you keep up with inflation by increasing the amount of you home owner insurance so you can maintain the right coverage for home replacement in an event of a loss.

Scheduled personal property covers articles that go beyond normal policy limits like jewelry, stamps, coins, furs, computers, antiques, computers and other similar items.

Normally, there is no deductible for this type of coverage and provides coverage broader than the normal home insurance policy. Additional coverage for money, securities, bank notes and deeds are also increased.

Secondary residence covers protection for a second home like a summer residence.

Theft coverage protection provides extra protection to include personal contents in your trailer, motor vehicle or watercraft without needing a proof or forced entry.

Credit card forgery and depositor’s forgery coverage protects you from loss, theft or unauthorized use of credit cards. Forgeries of check, promissory note or drafts are also included, which you can get without a deductible.

Coverage E: Home Insurance Personal Liability

Coverage F: Home Insurance Medical Payments

The Personality Liability section provides additional personal protection against lawsuits or claims resulting to physical injury or property damage caused to others due to property accidents or any other personal activities. The coverage also includes your family members living in the same house but does not include auto and business related incidents.

Included in the Medical Payments section are medical expenses for injuries caused by accidents in your property regardless of fault. This does not include your family members or those which involve your business at home.

Like other home insurance policies, there are exceptions. This may include motor vehicle damages, animal injuries, aircraft and parts. Losses due to floods, mudslides, earthquakes, damage resulting from war or nuclear hazard, water damages from sewer backups, seepage, dry rot, vermin or power failures and neglect.

Verify all information and check on all coverage for their individual policy as all home owners’ insurance policies have different coverage and exclusions.

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