Understanding Your Homeowners Policy

The terms and definitions for a basic Homeowners policy are listed below, to give you a better understanding what is covered on your policy.

  • Coverages A and B provide protection to the dwelling and other structures on the premises up to the policy limits.
    • The policy limit for Coverage A (Dwelling Coverage) is set by the policy owner at the time the insurance is purchased. This is the amount the insurance company will pay to have your home or dwelling rebuilt in the event of a covered cause of loss.
    • The policy limit for Coverage B (Other Structures) is usually equal to 10% of the policy limit on Coverage A.
  • Coverage C (Personal Property) covers losses to the insured’s personal property. The policy limit on Coverage C is equal to 50% of the policy limit on Coverage A.
  • Coverage D (Loss of Use) covers the additional expenses that the policy owner may incur when the residence cannot be used because of an insured loss. The policy limit for Coverage D is equal to 20% of the policy limit on Coverage A. This covers extra costs to rent a hotel room, set up utilities etc.
  • The coverage limit on Coverage E (Personal Liability) is determined by the policy owner at the time the policy is issued. Liability options are usually $100,000, $300,000, $500,000 and $1,000,000. It is best to discuss with an agent how much liability insurance to buy.
  • The coverage limit on Coverage F (Medical Payments to Others) is determined by the policy owner at the time the policy is issued. Medical Payments are usually $1,000, $2,000, $3,000, $4,000 and $5,000 per injured person. It is best to discuss with an agent how much to buy.

 

* This is a representation of a standard homeowners’ policy, please refer to your policy for specific details about your coverage.