homeowners insurance policy cover. There are a number of standard homeowner policies available in the United States. However, because all insurance in the United States is regulated at the state level, there are going to be slight differences in these policies depending on which state you live in. However, all of the policies have the same basic structure, there are six major coverages provided in the typical homeowner’s policy. They include:ight now, I’m going to talk about what does a typical
- Dwelling coverage: Dwelling coverage covers the house itself the sticks in the bricks.
- Other structures: This could be your fence your pool, your detached garage an outbuilding
- Household contents and personal property: all of the stuff that you have in your house is covered under this coverage.
- Loss of use: If you suffer a loss, for example, your home burns. While it’s being repaired you can’t live there you have to live somewhere else. All of the expenses that you incur for those costs would be covered by the loss of use.
- Personal liability: Somebody walks up on your sidewalk and you didn’t shovel the snow and they slip and fall, you’re protected from the lawsuit by your personal liability.
- Medical payments to others: This covers any medical payments that you have to spend to care for someone injured on your property. This doesn’t include you and your family members, it’s people who don’t live in your home.
Now, all of the coverages A, B, C, and D are a function of coverage A. What do I mean by that? Well say, for example, you’re dwelling coverage is $300,000 on your home, there are percentages that are found in standard policies which will dictate the value of the other coverages. If your coverage A is 300,000, coverage B other structures are usually going to be 10%. So, therefore, you’d have $30,000 in coverage for other structures. Coverage C is normally going to be 60%, so you’d have on a $300,000 home, $180,000 in coverage for C. D loss of use is usually 20%, so there you would have $60,000 worth of coverage.
Those 4 coverages are all a function of the amount of your dwelling. Liability and medical payments are different, liability is normally available in an amount from 0 up to 300,000, and medical payments are normally $1,000 to $2,000 amount but many companies will allow purchasing up to $10,000. That covers the different coverages on a standard policy.
Homeowner Insurance Policy Aspect
Now, let’s look at some other aspects of your policy. In addition to understanding the coverages that are provided on your policy, it’s important to know in the event you have a claim how that is going to be determined as well. So let’s consider the kinds of things you’re insured for.
1. homeowner insurance
2. home insurance policy
3. Homeowner's Policy Cover
4. home insurance rates
5. home insurance coverage
6. Insurance terminology
Insurance terminology calls these perils, and there are two types, open peril policies and named peril policies. Open perils simply mean this. Your policy covers you for everything except the list of items that they exclude, that’s open perils. The alternative is named peril, there they give you a list, and what are the things you’re covered for. If it’s not on the list you’re not covered. So which of those two would you prefer? Most people would like to have an open peril policy.
In the event that there’s a claim, how are claims going to be adjusted? Once again, there are two methods. Method number one, actual cash value (ACV). Actual cash value what does that mean? That means that we’re gonna reimburse you for the actual value of the lost item on the day it was lost. So, if you had a 5-year-old television we’re gonna reimburse you for a television that’s 5 years old. The alternative is full replacement cost, for full replacement cost coverage they are gonna replace your old item with the same item new. So again, which would most people prefer? full replacement cost open peril policies. In 49 of the 50 states in the United States, that policy is called an HO3 policy and it is the most common homeowner’s policy in the United States.