The typical homeowner’s insurance policy is divided into 2 parts:
- Home Insurance Property Protection
- Home Insurance Liability Protection
When you look at a home insurance declaration page, which is usually the first page in a homeowners insurance policy, you see Part I: Property Protection. This protection is usually broken down into four additional sections:
A. Dwelling, B. Other Structures, C. Personal Property, D. Loss of Use
Homeowner Coverages for Property
Typically covers your house, attached structures, fixtures in the house such as built-in appliances, plumbing, heating, permanently installed air conditioning systems, and electrical wiring. Many people underinsure their dwelling because they don’t understand how to determine the right value for the dwelling amount. The dwelling insured value should cover reconstruction cost and not real estate value.
Other Structures typically covers detached structures such as garages, storage sheds, and fixtures attached to the land including fences, driveways, sidewalks, patios, and retaining walls.
Detached structures used for business purposes are not covered under a personal homeowners insurance policy.
Personal Property typically covers personal property including the contents of your home and other personal items owned by you or family members who live with you.
This protection can be based on actual cash value (ACV) or replacement cost.
Loss of Use typically covers living expenses over and above your normal living expenses if you cannot live in your home while repairs are being made or if you are denied access by government order.
Additional living expenses are an important coverage.
Important Homeowners Policy Information
Home insurance policies may provide limited coverage on certain items, for example, small boats, however, most home insurance policies do not cover motorized vehicles unless they are unlicensed and used only at your home. Some items may have coverage limits such as firearms, artwork, business property, electronic data, jewelry, and money.