Understanding Your Homeowners Insurance Policy

Have you ever looked at your home insurance policy and scratched your head? Well, you are not alone! Even insurance professionals take courses to understand policy documents. It’s important to understand your coverage so that you’re not at a disadvantage if you have to file a claim.

Even if you look at nothing else in your in your policy, be sure to read and understand your declarations page. The declarations page summarizes your policy, it lists your agent’s contact information, the names of the insured, the policy’s effective dates, amount of coverage, deductibles and endorsements (which is supplemental coverage included in your policy).

Understanding coverages on a standard home insurance policy:

Coverage A covers the dwelling (home’s structure). The coverage amount is based on the amount it costs to rebuild your home (based on current construction costs). This coverage applies to most perils, except for those that are specifically excluded. Examples of excluded losses are earth movement (earthquake) and flood. Examples of covered losses include fire, theft and water that escapes from within an appliance.

Coverage B covers other structures, including sheds, detached garages, swimming pools, fencing, and gazebos.

Coverage C covers your personal property (furniture, clothing and other contents of your home).

Coverage D covers additional living expenses up to the stated limit, including food, lodging and clothing if your home is uninhabitable due to a covered peril (be sure to keep your receipts).

Coverage E covers personal liability. This provides you with coverage in the event that someone incurs an injury on your property or claims that you damaged their property.

Coverage F provides medical expenses for persons who do not live at your residence that are injured on your property.

Contact your agent if you have any questions about your coverage.