One of the questions we frequently receive from our Denver and Arvada clients is what coverage their homeowners insurance policy specifically covers.
A standard homeowners insurance policy includes four essential types of coverage:
- Coverage for the structure of your home.
- Coverage for your personal belongings.
- Liability protection.
- Additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster.
1. THE STRUCTURE OF YOUR HOUSE
This is the primary coverage provided by a homeowners insurance policy and pays to repair or rebuild your home if it is damaged or destroyed by a covered claim. It’s important to note that damage caused by a flood, earthquake or routine wear and tear and not included in standard homeowners policies. Also, when purchasing coverage for the structure of your home, it is important to buy enough to rebuild your home.
2. YOUR PERSONAL BELONGINGS
Your furniture, clothes, and other personal items are covered if they are stolen or destroyed by a covered claim on your policy. The limit of insurance provided is usually a percentage (typically 50 – 70%) of your home’s dwelling limit.
Most insurance companies include off-premises coverage as part of the policy. This means that your belongings are covered anywhere in the world. Some companies limit the amount to 10% of the amount of insurance you have for your possessions.
It’s also important to note that expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen. Generally, you are covered for between $1,000 to $2,000 for all of your jewelry and furs. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for it’s appraised value.
3. LIABILITY PROTECTION
Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets.
The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy. You are also covered not just in your home, but anywhere in the world.
Your policy also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage.
4. ADDITIONAL LIVING EXPENSES
This pays the additional costs of living away from home if you cannot live there due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other expenses, over and above your customary living expenses, incurred while your home is being rebuilt.
Coverage for additional living expenses differs from company to company. Many policies provide coverage for about 20 percent of the insurance on your house. You can increase this coverage, however, for an additional premium. Some companies sell a policy that provides an unlimited amount of loss-of-use coverage, but for a limited amount of time.
If you have any additional questions on homeowners insurance; or, if you would like to receive a FREE insurance quote, please don’t hesitate to contact our office.