BASICS OF HOMEOWNERS INSURANCE POLICY
There are several parts of an insurance policy that
can be quite confusing -- deductibles, exclusions,
inclusions and more. Below is a a rundown of the basic
parts and protections offered by a respectable
Every homeowners policy is a variant of a standard
policy utilized throughout the insurance industry. Any
type of coverage that is more than the standard is
considered an exclusive feature from your insurance
carrier. The typical policy is made up of two sections
and six areas of coverage, known as A through F.
Section I is made up of areas A, B, C, and D:
Coverage A (Dwelling)
Applies to the structure in which you live. This covers
the dwelling, attached structures (such as a porch or
garage) and property that is permanently installed (such
as wall-to-wall carpeting).
Coverage B (Other structures)
This applies to other structures on your property. This
would cover a garage or work shed that is not attached
to your home permanently.
Coverage C (Personal property)
applies to the content of the dwelling. This area would
cover your property anywhere in the world. There are
dollar limits on specific items that you should be aware
of because if your property exceeds these amounts, or no
amount is specified, you should cover them for an agreed
Coverage D (Loss of use)
Relates to your dwelling when it is
uninhabitable due to a loss that is covered by your
plan. All of your additional living expenses
(specifically those needed to sustain a normal standard
of living) or fair rental value (income lost from
Section II consists of areas E and F:
Coverage E (Personal Liability, Bodily Injury and
Comparable to Coverage C (Personal Property
coverage). You will be covered when you are on or off
your premises and will cover you when you are legally
responsible for an act that causes damage to someone
else's person or property.
Coverage F (Medical Payments)
Covers medical costs resulting from injuries that are
incurred by others while they are on your property.
There are other items that are automatically covered by
every homeowner's insurance policy, including the costs
involved in defending a claim, damage to the property of
others, and first aid when a third party is injured.
Another type of coverage that can be purchases is called
no-fault coverage. This covers property that is
borrowed, i.e. damage incurred to a pair of shoes
borrowed from your neighbor.