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Let me add a few comments here on how the coverages are usually presented on a Declaration page of a Homeowners policy. First there is the party being insured and who the company is that is providing the insurance. Then there is a specific term for the coverage to begin and end. Then there are many ways to then itemize the coverage, but here are some basics. The  policy is usually divided into two  Sections .Section I deals with property insurance and Section II Liability Insurance,  so within the section I coverages there are usually four parts Coverages A,B, C, D. Coverage A is the Dwelling Coverage. This can be sold on an Actual cash value basis ( very infrequently, but watch out for it ) usually on a 100 % of the dollar value of the estimated cost to replace the house itself. This is often difficult for consumers to understand, but no one really cares about the market value. What is important is the replacement cost and replacing one house destroyed is usually a lot more expensive then building one new in a subdivision. Make sure you have enough coverage. This is not an exact science so many companies offer extensions to increase the coverage beyond the stated value. Next is  Coverage B : These are the other structures appurtenant, outbuildings, fences, Gazebos unattached garages etc. Coverage C is usually Personal Property or Contents Coverage. This is very important to understand :You want replacement cost coverage not Actual Cash Value, ACV. The easiest way to think of this is the ten your old large and 200 lb TV. The ACV is going to be next to nothing. There is no continuing interest in buying  that type TV anywhere. But replacing it with a new TV with light weight plasma features is what you want. Coverage D is Additional Living Expense. This can be stated two different ways or a mixture of the two. Some companies list a maximum dollar limit available. Others list a maximum time limit and still  others list a maximum time limit and dollar limit. This covers the additional cost of living elsewhere while your home is reconstructed. It can also come into play if a Governmental authority won't let you near your home for safety reasons  ( i.e. forced evacuation form an impending hurricane).This coverage does not pick up the cost of things you would normally pay out of pocket, but the additional things and costs necessary to keep your household going while your home is repaired. The next set of coverages comprise Section II or liability coverage. Coverage E is very broad and covers such things as an injury to a child by your dog, or an inadvertent collapse of you deck with guests on it etc. Coverage E then is is sold in increments of 100,000 usually. The difference in price from say 300,000 to 500,000 is usually only a few dollars a year. If you have an umbrella policy, you may be required to carry a minimum of 500,000 in coverage. Coverage F is Medical payments coverage. This is usually quite nominal and is used to cover minor incidents where fault may not be much of an issue, but you feel obliged to pay for the medical bill. For example a neighbor picks up your mail for you while you are gone and trips on your garden hose. The injuries are not serious, but do require a couple stitches . The limit is low because the much more serious incidents would require negligence or absolute liability and would fall under Coverage E. 

I hope this helps. If you are in AZ.CA,TX, MO, or GA we'll be glad to assist you with placing your homeowners coverage.
Posted 12:49 PM  View Comments

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