If you take the time to read your Homeowners Insurance Policy, you should find at least six different sections of coverage. The names of the coverages may vary by insurance company, but they typically are referred to as Dwelling, Other Structures, Personal Property, Loss of Use, Personal Liability and Medical Payments coverages. These coverages are usually presented as sections of the policy and are often labeled Coverages A through F.


Coverage A--Dwelling

The Homeowner Policy's first coverage section protects your house and any attached structures, such as garages, decks or fences. The typical policy covers your home when it is damaged by most common hazards (also referred to as perils or causes of loss) including fires or storms. However, the following causes of loss are usually excluded from coverage under the Homeowners Policy:

• Earthquake
  
• Flood
  
  
• Faulty maintenance
  
• Damage from insects or vermin
  
• Wear and tear, gradual damage or deterioration

Coverage B--Other Structures

This coverage section protects structures that are not attached to the home, such as a detached garage, storage or utility shed, playground equipment and swimming pools.


Coverage C--Personal Property

This covers your possessions, whether they are at your home or away with you on vacation. Personal property is often covered on a named peril basis. This means that only the causes of loss listed in the policy section are covered. The coverage is also subject to limitations and exclusions. Types of property having significant value, such as jewelry, fine arts, collectibles, etc., may require special protection. Talk to your agent about scheduling (adding ) coverage on a floater which broadens and extends coverage for higher value possessions.


Actual Cash Value vs. Replacement Cost

Coverage under sections A and B is usually granted on either an actual cash value or a replacement cost basis. Actual cash value is defined as replacement cost minus depreciation. Replacement cost is the actual cost to replace the structure, regardless of depreciation. Check your policy to see which type of coverage you have. Coverage under section C is usually provided on an actual cash basis. However, your agent may be able to add replacement cost to your possessions just like that found in Coverage A.

Coverage D--Loss of Use

This provides reimbursement for the cost of additional living expenses while your home is being repaired due to a covered cause of loss. Additional expenses normally include food, housing, and transportation. However, the expenses must exceed what your family normally incurs.




Coverage E--Personal LiabilityThis section provides coverage if you are found legally liable for causing property damage or physical injury. Protection includes paying for your defense costs and any resulting judgment for covered incidents. Check with your agent for specific coverages since certain incidents are excluded from coverage.


Coverage F--Medical Payments

This coverage provides immediate rapid reimbursement for small injuries to guests in your home. This coverage does not apply to resident members of the family. For example, if your child and your neighbor's child are both slightly injured while playing and need to go to the emergency room, this coverage will pay for your neighbor's expenses but not for your own child. Keep in mind that most coverages are subject to a deductible and have conditions and exclusions.


This is a brief overview of Homeowners Insurance. All of the coverage provided by the Homeowners Policy is subject to various limitations such as exclusions, policy limits, basis of coverage and deductibles. Further, the policy has a number of other conditions and duties which affect coverage. It's important that you discuss the details of coverage and any other insurance questions with your insurance agent.