Home Insurance Property Coverages
What are the Home Insurance Property Coverages?
Home Insurance is broken down into four different property coverage categories and personal liability.
This is the amount that the structure itself is insured for. It includes everything that is permanently attached to the home and part of its construction. Think of walking into a completely empty brand new home with no furnishings, everything you see would be covered under this section. When you apply for home insurance one of the first things we will do is home rebuilding evaluator which is what we use to determine the cost to rebuild your home, including demolition costs. While it may be daunting to put an exact cost on rebuilding your home, we can help protect you by offering guaranteed replacement cost. Guaranteed replacement cost guarantees that your home will be rebuilt even if the stated insured value is less than the cost to rebuild as long as the information you provided for completion of the evaluator is reasonably accurate. Insurance companies do not expect you to have the level of knowledge that your builder did but a complete description of how the home is finished and accurate square footage is required.
Dwelling building coverage is the most important coverage under home insurance because all of your other property coverages are based on of a percentage of this coverage.
All the contents inside your home and on your property are covered under this section. This includes outdoor patio furniture, home furnishings and all personal contents right down to your shoes. If it is not directly built into your home it is most likely covered under your personal property. Almost all of our policies offer replacement cost on contents. This means that if you have a loss to any contents and they cannot be repaired to their original condition it will be replaced with a brand new item of similar kind and quality. For example if all your clothes are destroyed they are not going to go out and expect you buy all used clothes, you will instead replace them with brand new items. The amount of insurance on personal property is generally quite high as it is usually 80% of the insured value of your home. All policies have specific limits on certain items like jewelry and business property, you should review these limits to ensure that they are adequate. If you have any contents that are used for personal as well as business use the amount of coverage for those contents is limited under all policies. You may require additional coverage under a commercial policy to cover business property. Jewelry coverage can be increased beyond policy limits if you have a current appraisal for the item, it can be added separately to the policy as a endorsement/rider.
Detached building property coverage is for all of your outbuildings. Once again this coverage is usually included for up to 15% of your dwelling amount. It covers all of your small detached structures like a detached garage, or shed. If you have a unique outbuilding such as a large workshop it may not be covered adequately under this coverage. A special endorsement may be needed to be added to your policy to provide this coverage.
Additional Living Expenses:
If your home is made uninhabitable by an insured loss additional living expense will cover all your expenses while you live away from your home. It will pay the costs of your lodgings whether they are a hotel (short term) or even renting a new location (long term), along with all the increased associated costs such as eating at a restaurant because you do not have a kitchen in your hotel. It does not include usual living expenses.
Note: All of the above coverages are based on a percentage of the original dwelling building value.
Liability insurance is about financial protection, for you and your family. The personal liability coverage within your homeowner policy provides coverage for bodily injury and property damage sustained by others on your premises and worldwide for which you or your family members are legally responsible. For example, your driveway is slippery due to ice and someone falls down and breaks their leg or your child accidentally throws a ball through a neighbor's window, breaking an expensive piece of art that was on the table in the window - you may be held responsible for the damages caused. Under personal liability coverage, the insurance company defends you if you are sued, and pays damages to the injured person up to the limit of liability. This coverage will not cover any illegal or criminal activities.
The above coverages are only the basics of home insurance but each policy is different and should be reviewed carefully by you to ensure that you have the best coverage. Please contact our office if you would like a home insurance quote and further information about home insurance.