Personal Insurance

Homeowners Coverage:  

A Homeowners insurance policy will insure against damage to your home and personal property from a multitude of events such as fire, lightning, burglary, vandalism, storms, explosions and more.  Its basic purpose is to restore such items to the condition they were in before a loss occurred.  In addition, all homeowners policies contain personal liability coverage which provides protection when you are held legally responsible for bodily injury or property damage to others.  A basic Homeowners policy contains six (6) distinct sections as outlined below:

• Coverage A – Dwelling:  Dwelling coverage generally insures the physical structure of the home itself (rooms, fireplaces, tile floors, carpeting, etc.) and the structures attached to it, such as an attached garage.  The land where the dwelling is located is excluded.  The limit amount for this coverage should reflect the total cost necessary to completely repair or rebuild your home in the event it suffers a loss. 

• Coverage B – Other Structures:  This coverage section offers insurance on structures that exist on your property, but are not attached to your house.  Examples of such items include: gazebos, detached garages, swimming pools, swing sets, storage sheds, driveways, etc.  Coverage B is typically limited to 10% of your Coverage A amount. 

Example:  If your dwelling is insured for $300,000 under Coverage A, Other Structures would be covered for $30,000.

• Coverage C – Personal Property:  Personal Property coverage protects your personal possessions against the same risks and perils as described above (fire, lightning, burglary, etc.).  Such items can include: clothing, furniture, appliances, etc.  Coverage for Personal Property is usually limited to 50% to 75% of your Coverage A amount, depending on the carrier. 

Example:  If your dwelling were insured for $300,000, your Personal Property limit may range from $150,000 to $225,000.     

Personal Property coverage is typically written on an Actual Cash Value basis at the time of loss, which is the original cost of the item, less depreciation.  However, it is recommended that these items be insured on a Replacement Cost basis.  With this, your property items would be replaced with completely new materials or pieces, without considering depreciation.  Buying a Replacement Cost endorsement can add this coverage enhancement for you.  

It is important to note that certain classes of property can be specifically excluded from coverage simply because of their nature or because they can be covered by other types of policies.  Examples of such items are: animals/birds/fish; motorized vehicles; radios/cd’s while in or on a motor vehicle, etc.  In addition, certain classes of property have specialized limits of coverage, such as jewelry, fine arts, antiques, etc.  Click here to find out why. 

• Coverage D – Loss of Use:  In the event your residence is damaged from fire, windstorm or another type of covered loss, and it is deemed uninhabitable, your homeowners policy will compensate you for additional or temporary living expenses while the structure is being rebuilt or repaired.  Examples of such expenses are: temporary housing costs, furniture/car/boat storage, meal expenses, laundry costs, etc.  Loss of Use coverage is typically limited to 20% of your Coverage A – Dwelling amount.

Example:  If your Coverage A (Dwelling) limit is $300,000, Loss of Use coverage will be covered for $60,000.

• Coverage E – Personal Liability:  Personal liability coverage provides protection for bodily injury or property damage to others for which you are legally responsible.  For example, if your dog bites someone, a visitor falls down your stairs or your son throws a ball through your neighbor’s window, you are legally responsible for these actions.  Personal liability coverage helps to cover the associated expenses related to these damages.  Most homeowner policies provide a minimum limit of $100,000 of liability coverage, but it is recommended this limit be increased.    

• Coverage F – Medical Payments:  This coverage will pay for all reasonable and necessary medical costs incurred by a person or persons injured while on your property.  Examples of medical costs include: medical exams, surgical fees, X-rays, dental bills, ambulance charges, hospital visits, etc.  Generally, this coverage is limited to $1,000, but it can be increased up to $10,000 by adding an endorsement.

Tenant Coverage: 

Tenant Insurance offers coverage (similar to a homeowners policy) to people who lease or rent their living quarters.  It is a policy that combines personal property (contents) coverage, additional living coverage, personal liability coverage and premises medical coverage together in one contract.  Tenant insurance does not cover the building itself, but the contract may be endorsed to cover tenant improvements. 

Condominium Coverage: 

If you are the owner of a condominium unit, chances are your condo association has purchased a “master” insurance policy to cover common areas of the complex like the exterior building and walkways.  However, you as the unit owner are responsible for insuring your individual and personal interests within the space you own and are liable for.  Purchasing a condo policy will provide this protection for you.  A condo policy typically covers you for your personal belongings, along with limited dwelling coverage to insure what is not covered by the “master” policy.  Having the by-laws of your condo association will assist in determining what limit your dwelling amount should be.  Personal liability coverage is also part of this contract, protecting you against bodily injury or property damage to others for which you are legally responsible for.

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