What is Home Insurance?
Home insurance, also known as hazard or homeowner’s insurance, is a comprehensive policy that protects private residences. It combines personal insurance coverage for the home, its contents, additional living expenses, personal possessions, and liability. It provides financial security against property damage, loss, and accidents that occur on the homeowner’s property or caused by the homeowner.
Typical home insurance coverage options
Section I — Property Coverages
Coverage A – Dwelling
This coverage protects the value of the dwelling itself, excluding the land. To ensure adequate coverage, a coinsurance clause requires insuring the dwelling at 80% of its actual value. Losses are then adjusted at replacement cost within policy limits, offering protection against inflation. Renter’s insurance (HO-4) does not include Coverage A but provides additional coverages for improvements.
Coverage B – Other Structures
Coverage for non-business structures on the property, excluding private garages, is typically limited to 10%-20% of the Coverage A policy. Additional coverage can be obtained through an endorsement.
Coverage C – Personal Property
This option provides coverage for personal property, with specific limits for theft and loss of certain items. The coverage is typically set at 50% to 70% of the Coverage A policy, but some argue for more flexible options to avoid overpaying for unnecessary insurance.
Coverage D – Loss of Use/Additional Living Expenses
This option provides coverage for additional living expenses, including rental expenses and fair rental value if applicable. However, it does not cover utilities or other services associated with the rental.
Additional Coverages
This option includes coverage for debris removal, reasonable repairs, damage to trees and shrubs (excluding common wind and ice causes), fire department charges, property removal, credit card/identity theft charges, loss assessment, collapse, landlord’s furnishing, and certain building additions. The specific coverage may vary based on the policy form.
Exclusions
This option includes coverage for debris removal, reasonable repairs, damage to trees and shrubs (excluding common wind and ice causes), fire department charges, property removal, credit card/identity theft charges, loss assessment, collapse, landlord’s furnishing, and certain building additions. The specific coverage may vary based on the policy form.
Floods
Standard homeowners and renters’ insurance policies generally do not cover flood damage. Separate policies from the National Flood Insurance Program (NFIP) and a few private insurers are available to provide coverage specifically for floods.
Section II — Liability Coverages
Coverage E – Personal Liability
This option provides coverage for damages and legal liability, including a legal defense paid by the insurer. Dog bites account for about one-third of the claims under this coverage.
Contact us to learn more about the right homeowner’s insurance for you.