Your Homeowner’s Policy is actually a package of coverages that provides a broad array of coverages and for a number of perils, or causes of loss. There are a number of Homeowner’s Policy forms now available that offer differing levels of coverages depending on your particular needs such as the standard HO3 which most homes are insured by or the expanded HE7-21 with expanded coverages.
A Homeowner’s Policy provides coverage for the following major categories, although a number of subcategories and limits are included as well:
Dwelling: this section provides coverage for the structure of the house itself and includes any attached structures like a garage, carport, storage shed, etc.
Other Structures: this section provides coverage for other physical structures located on the same real estate of the dwelling, but are not attached to the Dwelling (home) itself. This may include a detached garage, storage building or fence. Although many new homes and developments today do not have or allow Other Structures, this coverage is automatically included in most homeowners policies and cannot be deleted.
Personal Property: this section provides coverage for the contents, clothing, furniture or other items that are not attached to the structure such as furniture, appliances that are not built-in, rugs, clothes, etc. There are reduced limits for the theft of certain items such as jewelry, collectibles, guns, silver, etc. that may be more appropriately covered by scheduling them on a Personal Articles Floater or scheduling on your homeowners.
Personal Property is generally insured for Replacement Costs (which means that Depreciation is not applied against the value in the event of a coveredd loss.) and is automatically covered at 70% of the value of the Dwelling/Home if the Replacement Cost option is selected. If the Replacement Cost selection is not made, then the value is generally shown at 50% of the insured value of the Dwelling/Home.
Personal Liability: this section pays for unintentional bodily injury or property damage to others that you may be held legally liable for. The cost of your defense is outside the stated limit of liability in your policy which generally begins at $100,000, however, a minimum of $300,000 is required to comply with most Umbrella or Excess liability policies.
Loss of Use: this section reimburses you for the out-of-pocket living expenses that you may incur due to a covered cause of loss rendering your home temporarily uninhabitable. This covers the rental costs that you may incur as well as out-of-pocket expenses for meals, etc. since you may not be able to prepare meals at home. In the newer HE7-21 form the policy may pay the actual mortgage payments for the damaged home for up to 12 months as well.
Medical Payments: this section provides a no-fault medical limit for persons injured on your property, or your temporary premises, where no legal liability may be involved. It pays the medical expenses for the injured person up to the Medical Payments limit.