What is insured? Generally, a homeowner’s insurance policy includes at least six different coverage parts. The names of the parts may vary by insurance company, but they are typically are referred to as Dwelling, Other Structures, Personal Property, Loss of Use, Personal Liability and Medical Payment Coverage. They are usually presented as policy sections and are often labeled Coverage 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 many hazards (also known as perils or causes of loss) including fires or storms. However, the following causes of loss are usually excluded from coverage under the homeowner’s policy: -Earthquake -Flood -Faulty maintenance -Damage from insects or vermin -Wear and tear, gradual damage or deterioration Ask your agent which, if any, may be added by endorsement, should you feel the need to have such coverage.

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 possession, 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 arts, collectibles, etc., may require special protect ion. Talk to your agent about scheduling (adding) coverage for high-valued possessions.

Actual Cash Value vs. Replacement Cost Commonly, protection under sections A and B is provided 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 agreement may be able to add replacement cost to your possessions just like that found in Coverage A.

TYPES OF HOME INSURANCE POLICIES

There are two types of policies: All risk and named peril. A named perils policy covers losses that are due to only those perils listed in the policy. The peril typically covered include fire, windstorm, hail, and other direct physical losses. An all risk policy covers losses that are due to any peril except those specifically excluded in the policy. It is important to note the all risks policy provides broader protection than do named perils policies. The five types of homeowner packages offered to owners of single family owner occupied homes, condominiums and apartments are HO-1, HO-2, HO-3, HO-3 with H015 and HO-8.

HO-1 Basic Homeowner: Insures your property against the following 11 basic named perils: fire/lightening, loss of property removed from premises endangered by fire or other perils, windstorm/hail, unrest, aircraft, vehicles, smoke, vandalism/malicious mischief, theft, and breakage of glass constituting a part of the building.

HO-2 Broad Basic Homeowner: Insures your property against the 11 basic named perils in HO-1 plus 7 additional named perils: falling objects, collapse of roof due to weight of ice or snow or sleet, collapse of building(s) or any part thereof, bursting of steam/hot water system, leaking of plumbing or heating system, freezing of pipes, sudden and accidental damage from artificially generated currents to electrical appliances or devices or fixtures or wiring.

H0-3 Special Extended Homeowner: Provides for comprehensive coverage (All Risk) on your home and the 18 (HO-2) broad named perils coverage on your contents. This is the most popular of all homeowner policies.

HO-3 with H0-15 Comprehensive Homeowner (All Risks): Covers your home and personal property for everything that is not specifically excluded. This policy usually provides the broadest all risks coverage available, but is not offered by all insurance companies.

HO-8 Modified Homeowner: Covers homes that have suffered extensive depreciation, historical or architectural features may make the home more expensive than its market cost. This coverage is more restrictive much like HO-1 but IS geared towards older homes.

HO-6 Condominium Unit Homeowner: Covers items not insured by the condominium association's policy, Such as, property damage to personal belongings, wall, floor and ceiling coverings, and any accessories not originally installed in the unit. An HO-6 policy is basically an H0-2 policy. It also provides additional coverage for personal property, loss of use, personal liability and medical payments.

HO-4 Renters Coverage: Insures your household contents and personal belongings against the named perils In H0-2 policy. It also provides coverage for additional living expenses and includes personal liability protection. You can purchase optional coverage to add to your policy. They are called endorsements or sometimes "floaters". Some common endorsements:

Inflation Guard Endorsement: Allows your insurance company to automatically change your policy Iimit. This is done to cover the replacement cost of your home that is increasing with Inflation to maintain your coverage at 8O% of replacement cost. Not all companies offer this endorsement.

Guaranteed Dwelling Endorsement: Covers the market value of your home. Often the market value is higher than the replacement cost.

Guaranteed Contents Endorsement: Covers the Cost to replace a Personal item even though you might have owned it for a number of years andit has depreciated in value.

Other Structures Endorsement: Covers larger more elaborate structures (gazebos, guest houses etc.) that would exceed the standard 10% Iimit.

Sewer and Drains Endorsement: Covers damage to your finished or storage basement In the event of faulty sewer lines or drams. This is not covered by standard policies.

Scheduled Personal Endorsement: Sometimes called a "personal article floater' covers possessions such as jewelry, furs, stamps, coins, guns, computers, antiques, and other items that may exceed normal limits in a standard policy. Each Item is valued, itemized and described. Excluded perils are Iisted. There is usually no deductible applied to this coverage.

Blanket Endorsement: Is used in place of a scheduled personal endorsement. There is no itemizing but the Blanket Endorsement covers what the standard policy does not cover such as jewelry, coins, etc.

Increased Limits on Money and Securities Endorsement: Increases the coverage money, bank notes, securities, deeds, etc.

Secondary Residence Premises Endorsement: Applies to a secondary residence.

Home Daycare Endorsement: Covers any liability claims 11 you operate a daycare in your home.

Business Pursuits Endorsement: Extends liability coverage if you operate an at-home sales business or other small "franchised" ventures such as Tupperware and Avon. It does not extend coverage if you own the business.

Home Business Endorsement: Extends liability coverage in your home if you own and operate a business in your home. It must be a small business similar to those mentioned above.

Personal Injury Endorsement: , Extends liability coverage to you if you are sued for Libel, Slander, and Defamation of Character. This is covered in umbrella policies and may not be needed.

Income Property Endorsement: Extends liability coverage to areas of your home or premise that you rent.

Ordinance and Law Endorsement: Extends coverage for additional costs of reconstructing your home under current codes. This usually applies to older homes.

Watercraft Endorsement: Extends personal liability and medical payments on small sailboats and outboard motor boats.

Theft Coverage Protection Endorsement: Extends theft protection to the contents of your motor vehicle, trailer or watercraft without proof of forced entry.

Credit Card Forgery and Depositors Forgery Coverage Endorsement: Covers the loss, theft or unauthorized use of credit cards. It also covers forgery of any check, draft, promissory note etc. This endorsement has certain exceptions. No Deductible applies.

Flood Insurance: Should be required by your lender if your home is located in a flood plain. Depending on where you live you may qualify for flood insurance. Flood insurance covers direct physical damage to the main home and its foundation and erosion damage. It does not cover structures extended over water and structures other than buildings such as pools and gazebos.

COMMON HOME INSURANCE DISCOUNTS

New Homes: May enjoy discounts up to 14%.

Security Systems: Such as deadbolt locks, simple alarm systems and smoke detectors may reap discounts from 5% to 15%. Sophisticated monitoring services and integrated sprinkler systems may reduce your premiums as much as 20%.

Combined Policies: If you combine your automobile and homeowner policy with the same carrier you may obtain discounts from 5% to 15%.

Carrier Longevity: If you maintain your coverage with the same carrier for a number of years they will usually reward you with a discount.

Retired Homeowner: On average stays home longer and may be rewarded with a 5% discount.

Non-smoker: Some carriers reward non-smokers a 5% discount.