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Basic Homeowners Policy

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, storage sheds, 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; etc. In addition, certain classes of property have specialized limits of coverage, such as jewelry, fine arts, antiques, etc.  

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 homeowner’s 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.