Coverage A: Dwelling Coverage
The amount of coverage on the primary structure itself. This covers everything from the slab to the roof that is permanently attached to the structure. It is typically written on a "Replacement Cost" form. This means that the house should be insured to what it would could to rebuild not what its "market value" is. It is important to speak with your insurance agent to determine the appropriate dwelling coverage for your home as each home is different and there are "caps" to the dwelling coverage, depending on the policy you choose. Most insurance companies will automatically extend your dwelling coverage to 120% of that stated on your declarations page, as long as your home is currently insured to 100% of it's replacement cost, thereby creating a "cushion" for inflation and increased building costs. Other insurance companies offer 150% Replacement Cost Coverage and even "Guaranteed No-Cap Replacement".
Other Structures Coverage
Insurance for structures not attached to the dwelling. This includes, but is not limited to, fences, sheds, detached garage, pools, etc. The standard amount offered is typically 10% to 50% of what the Dwelling Coverage insurance is. This amount of insurance can be increased if needed, but is limited to the amount of coverage you have chosen on your Home Insurance Declarations Page.
Personal Property Coverage
Most policies offer an additional amount (typically 50% to 75% of what the Dwelling coverage is) for insurance on your personal belongings or contents. Be careful, because there are limits for items such as jewelry, silver, guns, furs, artwork and cash, among other things. This amount of insurance can be increased if needed as "Scheduled Personal Property". If you have an in-home business or business equipment at your house discuss this with us and we will advise you accordingly. This amount of insurance can be increased if needed, but is limited to the amount of coverage you have chosen on your Home Insurance Declarations Page.
This insures you for your negligence. It is a very important coverage and, therefore, it is best to discuss the amount of coverage with your agent. The amount of coverage varies from $100,000 to $1,000,000, depending on your needs and the insurance company limits. For needs in excess of $1,000,000, you will typically want an "Umbrella Policy".
Home Insurance Terms
Loss of Use: The standard amount for this insurance is 20% of the Dwelling coverage. If your house, condo or apartment, becomes unliveable because a covered claim occurs, this coverage will pay your expenses in a comparable living situation up to the coverage limits, or one year, whichever comes first. This amount of insurance can be increased if needed, but is limited to the amount of coverage you have chosen on your Home Insurance Declarations Page.
Medical Payments: To pay medical bills of others sustaining injuries on your property in which your where not negligent. The limits range from $1,000 to $10,000 and up. This amount of insurance can be increased if needed, but is limited to the amount of coverage you have chosen on your Home Insurance Declarations Page.
Liability: This insures you for your negligence. It is a very important coverage and, therefore, it is best to discuss the amount of coverage with your agent. The amount of coverage varies from $100,000 to $1,000,000, depending on your needs and the insurance company limits. For needs in excess of $1,000,000, you will typically want an "Umbrella Policy".
**A deductible typically applies to all the insurance mentioned expect Liability and Medical Payments.
Actual Cash Value: Your home's actual cash value is calculated by determining its original value, minus the amount your home has depreciated since you bought it or since it was new. This is not a very popular coverage, due to the limits on the value of your home.
Flood Insurance: The biggest misconception is that rising waters (floods) are covered under your standard homeowner's insurance. It is not. Most insurance companies can provide Flood Insurance, although the premiums and coverages are regulated by F.E.M.A. Flood Insurance is designed to reimburse property owners from the peril of "flood". "Flood" is defined as a condition of inundation of normally dry land area from the overflow of inland or tidal waters, the unusual and rapid accumulation or runoff of surface waters from any source, mudslides and land subsidence when earth is carried by waves or currents of water.
Deductible: The Deductible is the amount of damages you agree to pay for if you file a home insurance claim. Consult with your insurance professional, as choosing a higher deductible can substantially lower your home insurance premium, although, if you file a claim, you'll have to pay the chosen deductible to receive payment from your insurance company. In some cases lower deductibles may be more cost effective, depending on your insurance rates.
Home Insurance Terms
Declarations Page: Your Declarations Page of your policy summarizes the coverage information essential to your homeowner's insurance coverage: the policyholder's name and address, the home insurance premium, as well as the coverages, limits, and deductibles.
Endorsements: Endorsements are changes to the original insurance contract. In home insurance coverage, endorsements may include changing your deductibles or adding optional coverages to your homeowner's insurance policy.
Exclusions: Exclusions are situations that are not covered by a given home insurance policy. Specific exclusions are listed in your homeowner's insurance policy.
Umbrella: It provides a higher limit of liability coverage in excess over your primary policies (i.e. home, auto, general liability, etc). It is used in one of three ways: (1) to provide additional limits of protection over the coverage listed on your primary policy, (2) to act as primary coverage if your primary limits are exhausted, and (3) to provide coverage for some risks, subject to a retention (a.k.a. deductible), when your primary coverage does not.
Insurance Score: Insurance scores are based on analytical models that objectively measure the relative likelihood of future insurance losses based on your credit history. Most insurance companies have adapted to some type of insurance scoring in order to apply the appropriate discounts and/or surcharges to your specific policy. These scores are provided by independent consumer reporting agencies, to the insurance companies.
*These definitions are not meant to be taken in place of your current policy language. Instead the definitions are meant to help guide you to what coverages are available on a home insurance policy. Please consult your agent or your policy for the insurance coverage specifics.