Coverages defined: Understanding your homeowners insurance
One glance at your homeowners insurance policy documents and you might feel like you’re wading through alphabet soup. Coverage A, B, C and D, and that’s just the start. Knowing what to make of the letters is the first step to understanding the insurance protection available for your home.
Coverages A to F are standard coverages for most homeowners insurance policies. While your policy may or may not include them all, they are most common. Coverage G and beyond become more specialized in dealing with barns and other structures beyond those on a typical residential property.
Here’s a quick breakdown of what you need to know to digest your homeowners insurance policy.
Coverage A/Dwelling coverage
It’s unthinkable, but if your home were destroyed or damaged, this coverage is the amount available for rebuilding or repairing. Compiled from public records and real estate assessments, this amount is estimated and is adjustable. It protects your home structure, including the walls, floors, roof, windows, support beams and foundation, as well as attached patios, porches and garages.
Coverage B/Other structures coverage
This part of your policy protects fences, sheds, detached garages and other structures excluded from your dwelling coverage. Detached buildings used for business purposes are not covered under Coverage B. Coverage B also does not cover the contents or personal belongings in the detached structure.
Coverage C/Personal property coverage
Personal property coverage covers your things – all the stuff that would fall out if you could turn your house upside down. Personal belongings that are damaged, destroyed or stolen resulting from a covered peril (as outlined in your policy) are protected under Coverage C. Vehicles are not covered through Coverage C.
Coverage D/Loss of use coverage
If damage occurs to your home as the result of a covered peril and you’re unable to live in it, loss of use coverage enables you to find temporary housing. It can include coverage for living expenses during this time. Coverage is usually available for up to the duration of time for repairs to be complete and with the coverage limit.
Coverage E/Personal liability coverage
If an accident occurs on your property, this coverage protects you from claims and lawsuits resulting from injuries or death to anyone not residing in the home. Personal liability claims can cover medical or legal expenses and protect you if you are responsible for accidental damage to someone else’s property.
Coverage F/Medical payments coverage
Minor accidents and injuries to visitors on your property are covered under Coverage F, more commonly called medical payments coverage. This coverage is intended to resolve small claims with the hopes of preventing lawsuits and is available regardless of who is at fault.
Coverages G, H and I are common coverages for farming properties. All coverage types have exclusions and limits. In addition to the above coverages, additional options can provide extra protection. Flood insurance, equipment breakdown, identity fraud and service line are all coverages that can be added to your policy and offer additional protection.
With all the different coverages, limits, exclusions and additional options, it might feel more like an insurance coverage buffet serving alphabet soup! Your insurance professional can help you understand what coverages are necessary to ensure you and your property are fully protected against the unexpected.