Homeowners Insurance

Homeowners Insurance

What Does Homeowners Insurance Cover?

Dwelling

Other Structures

Personal Liability

Personal Property

Medical Payment

Loss of Use

Dwelling

Dwelling includes the main structure of your home and other structures that are attached to it. Common examples of structures attached to a home are:

Attached Garage

Backyard Deck

Front Porch

Foundation

Chimney

Roof

More than just covering exterior structures

Dwelling coverage may also include things that are inside of your home:

  • Built-in appliances: oven, furnace, water heater, etc.
  • Permanent fixtures: kitchen cabinets, upgraded hardwood flooring, etc.

Other Structures

Beyond your dwelling, there may be other buildings or structures within your property. Most common examples of these structures are:

Storage Shack

Detached Garage

Barn or Shop

Fence

These structures are covered within the verbiage of your insurance documents, which includes how the insurance company estimates claim payout in the event of a covered claim.

Personal Liability

Personal liability coverage protects you, the homeowner, in the event of an accident inside or outside of your home. The coverage provides financial protection for:

Pain & Suffering

Lawsuit Relating to An Accident

Property Damage As Result of An Accident

Coverage For Your Pets

According to the Insurance Information Institute, there were nearly 18,000 dog bite claims in 2019 and the average payout for a dog bite claim was $44,760. Dog bite claims remain as one of the top personal liability insurance claims year after year in the United States.

The financial protection afforded by your personal liability coverage also extends to injuries or damages caused by your pets including dog bites.

In-depth article: Personal Liability Coverage  

Personal Property

Exactly like its name, personal property coverage provides financial protection for all of your personal belongings. Here is a list of the most common examples:

Clothing

Furniture

Electronics

Kitchenware

Sports Equipment

Collectible Shoes

High value personal items such as jewelry, guns, cash, and business properties have coverage limits and may require additional endorsement to be adequately insured for their value. 

In-depth article: Personal Property Coverage  

Medical Payment

Simply known as "Med Pay," this coverage is designed specifically to cover the cost of medical expenses for any injuries your guests sustained while they are visiting your home. 

Med pay offers some distinctive benefits that are different than other types of liability insurance: 

No Deductible

Does Not Require Determination of Responsibility.

Will Make Payout Right Away

In-depth article: Medical Payment Coverage  

Loss of Use

Another essential coverage on your renters policy is called additional living expense, also commonly known as loss of use. Just as its name says, this coverage will take care of additional living expense in the event that your unit is not livable due to a covered peril such as fire.

Examples of covered expenses:

Temporary Housing

Additional Expenses for Food

Additional Cost in Transportation

Pet Boarding Cost

Moving Cost

The amount of coverage is typically between 20% to 30% of your homeowners dwelling coverage, and most insurance companies do not have deductible for this coverage.  

In-depth article: Additional Living Expense Coverage  

Coverage Limits & Deductibles

Dwelling coverage is the main coverage that determines your homeowners insurance coverage limits. It is also the baseline that is used to determine coverage limits of other coverages such as personal property and loss of use.

Here is an example where the dwelling coverage is set at $500,000: 

Dwelling Coverage

$500,000

Personal Property Coverage

$250,000
50% of dwelling coverage

Loss of Use Coverage

$125,000
25% of dwelling coverage

How is the dwelling coverage limit established?

The main factor that determines your dwelling coverage is your home replacement cost.

Home replacement cost is the total estimated cost including labor and material to rebuild your home back to its original condition prior to a claim.

There are several main factors used to determine home replacement cost:

  • Building info - year built, square footage, etc.
  • Exterior features - exterior wall material, age of roof, etc. 
  • Interior features - number of bathrooms and kitchens, type of interior flooring, etc. 

In-depth article: Home Replacement Cost  

How is home replacement cost different than home sales price?

Home sales price is the market price of your property including both value of the land and value of any improvements on the land, such as your home, landscaping, or other features.

Home replacement cost on your insurance policy is the estimated cost including labor and material to rebuild your home back to its original condition prior to an insurance claim.