The biggest investment most people will ever make is in their home. That’s why it makes sense to protect the sizable financial investment you’ve made in your own home with a comprehensive homeowners plan.
The homeowner's policy is a combination of property and liability coverage and is tailored to meet the needs of a homeowner. The following is a basic outline of the comprehensive homeowner's policy and the endorsements most widely used on the comprehensive policy.
The comprehensive home policy provides coverage for dwellings that are owner occupied. The comprehensive policy provides coverage against risks of direct physical loss to the dwelling, detached structures, and personal property, except for those causes of loss that are specifically excluded such as flood.
The policy includes extra coverage for debris removal, fire department charges, property removal charges, and coverage for trees, shrubs and plants. Coverage is also included for loss involving credit cards, forgery, and counterfeit money. Each coverage has limitations and is subject to certain conditions.
COVERAGE (A)-DWELLING: This amount of insurance applies to the dwelling and attached structures. The limit of insurance for the dwelling is based on what it would cost to replace the home. It is not the market value of the property.
COVERAGE (B)-OTHER STRUCTURES: This coverage applies to detached structures such as a garage or storage shed. The limit of coverage is set at 10% of the dwelling. A higher limit can be purchased.
COVERAGE (C)-PERSONAL PROPERTY: Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types of property, and some property is excluded from coverage. The overall limit for coverage C is 80% of the dwelling limit. Coverage C can be modified in several ways with endorsements.
COVERAGE (D)-LOSS OF USE: This coverage applies in the event of a loss to the dwelling. If the home was temporarily uninhabitable, payment would be made for expenses incurred to live elsewhere. The limit of coverage is set at 20% of the dwelling amount.
COVERAGE (E)-PERSONAL LIABILITY: Section II of the homeowner's policy provides liability coverage. The insuring agreement provides liability coverage at your home, or anywhere in the world, to bodily injury you may unintentionally inflict on others or to accidental damage to their property. The payment is for compensatory damages only and you must be found legally liable. Liability coverage is provided for the named insured and members of the named insured's household who are relatives while living in the household. Personal liability has a basic limit of $1,000,000.00 per occurrence, which the insured may increase for an additional premium. In addition to the basic limit, this section provides coverage for defense costs. The insurance company will defend any action against you alleging bodily injury or property damage that is seeking compensatory damages, even if it is groundless, false or fraudulent. If greater limits of liabilty coverage are required we recommend a Personal Umbrella Liability policy.
COVERAGE (F)-MEDICAL PAYMENTS: This coverage will pay the necessary medical expenses for bodily injury of others. Coverage applies to accidents that occur on the insured premises or any location when caused by an unintentional action of the insured. The coverage has a limit per person.
GUARANTEED REPLACEMENT COST ON BUILDING: This endorsement will make up a shortfall in the event that the replacement cost of your home was underestimated.
REPLACEMENT COST ON PERSONAL PROPERTY: Property loss settlements under the homeowner's policy are made on an actual cash value basis. When the replacement cost endorsement is added, the loss settlement payment is sufficient to replace the item for the cost at the time of loss without deductions for depreciation.
INFLATION GUARD ENDORSEMENT: When this endorsement is added to the policy, it increases by .5 - .8% monthly, the limit of coverage for A, B, C, and D.
EARTHQUAKE COVERAGE ENDORSEMENT: Earthquake coverage is excluded under Section I of a homeowner’s policy. Adding this endorsement removes the exclusion and adds earthquake coverage which is subject to a deductible.
SEWER BACKUP: Covers damage caused by the backing up of the sewer.
INCREASE OTHER STRUCTURES LIMIT: This endorsement increases the limit under coverage B, Other Structures. The limit for unattached structures on the residence premise increases, and the increase is in addition to the limit already provided.
SCHEDULED PERSONAL PROPERTY: The scheduled personal property endorsement is designed to provide insurance for certain types of personal property that have high values in relation to normal household contents. Some examples would be jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, postage stamps, rare coins and tools. Scheduled property is insured for its value.
BY-LAW ENDORSEMENT: When a severely damaged building has to be rebuilt, the entire building may have to comply with current standards. The by-law endorsement covers additional expenses to bring the building up to standard.
BUSINESS IN HOME EXTENSION: If you operate a business from your home, there is limited coverage on your home policy for business contents and no liability insurance. This endorsement will provide increased limits of business contents and liability coverage.
SINGLE LIMIT OF INSURANCE: The limits for coverage A,B,C, & D are added together to form a single limit. It prevents a possible shortfall in the amount in any one section.