Homeowners insurance is one of many essential pieces to a solid homebuying plan. You need enough dwelling coverage to rebuild your home and replace its contents, liability protection and loss of use coverage in case you’re displaced.
Your location and zip code play a role in your premium, as do the size of your dwelling and other factors. You’ll also want to consider deductibles and additional riders. Discover more at Insurance Agency Outsourcing Services.
Coverage A
Homeowners insurance protects you from being forced to pay unaffordable repair bills out of pocket when unforeseen extreme weather events damage your home. Additionally, it pays for your hotel and food expenses if you must temporarily move out while repairs are being made.
Your home and other structures on your property are insured at their replacement cost minus depreciation. This is a major benefit that you can’t get from any other type of insurance.
Homeowners insurance covers personal possessions inside your home, up to a percentage of your dwelling coverage limit. This includes clothing, electronics and sports equipment. It also covers personal belongings when they are away from your home.
Coverage B
Other structures coverage (also known as Coverage B) on homeowners insurance pays to repair or rebuild structures on your property that aren’t attached to your home. This includes fences, sheds, detached garages and pools. Typically, it covers up to 10% of the limit in your dwelling coverage.
Say a severe windstorm damages Ronald’s gazebo, but his dwelling policy only has a limit of $330,000. That’s where other structures coverage comes in: It would pay up to that amount to replace the gazebo. This is a valuable feature for many homeowners. Your agent can help you determine if this coverage is right for you.
Coverage C
Many home insurance policies include Coverage C, which protects your personal property from damage or loss. This coverage is typically capped at 10% of the dwelling coverage limit.
Dwelling coverage covers the physical structure of your home and the systems that keep it functional, such as plumbing and wiring. It’s usually established on an actual cash value or replacement cost basis.
Coverage C, on the other hand, covers your possessions — things like furniture, electronics and clothing — against damage or loss caused by covered perils in the policy. The most common of these are fire, lightning and theft. However, it doesn’t usually cover things that fall out of a window or get lost in the rain.
Coverage D
Homeowners insurance is a form of property insurance that offers financial protection to homeowners in exchange for a premium payment. Homeowners policies usually include several different coverage parts that work together to protect your property from various hazards. These coverage parts are typically referred to as Dwelling, Other Structures, Personal Property and Loss of Use.
For example, if your house is damaged and rendered uninhabitable by a covered peril, loss of use coverage, also known as additional living expenses (ALE), helps pay for hotel costs, transportation and food. This is an important part of home insurance that is standard with most homeowners and renters policies.
Coverage E
In addition to the dwelling, a home insurance policy also typically covers other structures on the property such as a garage, shed or fence. Normally these items are covered up to 10% (or some other percentage) of the dwelling coverage limit.
Coverage E addresses personal liability, covering medical expenses for anyone who is injured on the property. This is a big benefit of having home insurance. If a delivery person falls on Stanley’s front steps, his home insurance would take care of their medical bills and lost wages. It’s a peace of mind that many homeowners take for granted. The benefits can be life changing in an emergency.
Coverage F
Homeowners insurance often covers structures that are not attached to your dwelling like a fence, shed or gazebo. This is typically up to 10% of your dwelling coverage limit and may also include personal property outside the home.
Typical home insurance policies include medical payments to others coverage, which pays for minor injuries sustained by guests on your property — regardless of whether you are legally at fault. This takes a back seat to liability coverage, which features higher limits to handle more substantial claims.
Inflation Guard is an optional home insurance policy feature that automatically increases your policy limits with each renewal to ensure that your homeowners coverage keeps pace with inflation. This may save you money on future claims.