Don’t be that guy. You know the one, the guy who knows he needs insurance, so he buys something that sounds good without really understanding what’s covered, how its covered, or what takes away coverage. Don't be him. Start by learning what’s in your policy and how much coverage you have.
Usually the first page of an insurance policy, the declarations page, identifies who is insured, what is covered, what the limits of the policy are, and the time the policy is in force. Specifically, on homeowner’s policies, you will notice different coverages:
Coverage A covers your dwelling, including any attached structures (for example, an attached garage). The dollar amount under the limit of liability is the amount up to which your insurance company will cover damage. This amount is based on a replacement cost estimate (RCE) of how much money is needed to rebuild your dwelling if it was destroyed. Sometimes there are penalties if you have a claim and the amount insured – or covered – is not enough to meet what your policy requires. Make sure you have enough coverage by calling us today.
Coverage B covers other non-business structures on your premises that are not attached to your home. Other structures might include a detached garage, guest house, swimming pool, or fence.
Coverage C covers personal property such as clothing, furniture, books, and even pots and pans. This coverage only covers your property on an actual cash value basis. This means that your insurance company will only pay up to this based on replacement cost minus depreciation. Most insurance companies allow a change to your policy so that they pay for replacement cost of your personal property – the amount it would cost to replace your belongings with like kind and quality. This makes it possible to replace all of your contents.
Coverage D is coverage for additional living expenses. This coverage provides payments to you if you cannot continue to live in your home due to a loss covered by your insurance policy.
Coverage E covers you if you are liable for injuries or damages against other people (outside of your household). You may not be directly responsible, but if injury occurs on your property, you are held responsible and liable for it. This personal liability coverage is important coverage because not only can it pay the claim, it will cover the services of a lawyer who defends you in the event of a lawsuit.
Coverage F is a sum that your homeowner’s insurance pays for medical payments to others. This coverage helps pay for small injuries that happen to guests while on your property, regardless of whose fault it is.
Now that you know the basics of what a homeowner’s policy covers, you can check your declarations page to ensure you have the correct coverage for your home in the event of disaster. When you are thinking about natural disasters and don’t even know if your insurance covers that, head over to Flash.org to find out what most property insurance does (and doesn’t) cover.
Contact us today if you need additional coverage or would like to make an appointment to discuss coverage options available to you.