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Standard Home Insurance: What You Get

Even veteran homeowners insurance buyers can stumble when it comes to citing exactly what’s typically included in a standard policy. That’s why we’ve put together this handy Home Insurance 101 resource. Standard policies typically include six types of protection for you house. See the tiles below for a quick explanation of each type of coverage, You can click ‘More details’ for further information on each coverage type.

Dwelling Coverage

Dwelling coverage is what comes immediately to mind when someone says ‘home insurance.’ It protects the structure of your house against covered perils such as fire, wind, lightning, and hail. You should have enough dwelling coverage to rebuild your house from the ground up should it be destroyed by a covered event. One caution: Separate policies are needed for flood and earthquake coverage.

Other Structures Coverage

Other Structures protection is exactly what you might think. It protects sheds, detached garages, and fences from covered events. Typically, coverage limits are set at 10% of the amount of dwelling coverage, but you can purchase more protection if necessary.

Personal Property Coverage

Personal Property coverage protects your possessions in case they’re stolen or destroyed by a covered peril. Electronics, clothing, and furniture are among the items in this category. Limits typically are set at between 50% and 70% of your dwelling coverage limit. However, coverage is often limited for certain high-value items such as jewelry or furs – these can be covered fully by scheduling an endorsement to your policy.

Personal Liability Protection

Personal Liability protection helps if someone sues after being hurt on your property or suffering property damage because of an event caused by your or a member of your household. It can pay for your legal defense and for any settlement or award in the lawsuit, up to your coverage limits. You also can be protected from injuries caused by your pets. The coverage limit typically is set at $100,000, but you can purchase additional coverage.

Loss of Use Coverage

Loss of Use coverage kicks in if your house becomes uninhabitable because of a covered event. While it’s being repaired or replaced, this coverage helps with your living expenses, including hotel and restaurant bills. Limits typically are set at 20% of your dwelling coverage limit; however, sometimes policies include time limits as well.

Medical Payments Coverage

Medical Payments coverage helps if you’re responsible for the injuries of someone who does not want to sue. It can pay medical expenses up to your coverage limit. That limit typically is set at $1,000, but you can purchase additional coverage.

What is Other Structures Coverage?

Other Structures Coverage (Coverage B) is the portion of your home insurance policy that covers the cost of rebuilding or repairing structures on your property other than your home if they’re damaged because of a covered peril such as fire, wind, or hail. This includes detached garages, sheds, and other detached buildings on your property – even fences – that may become damaged by a named peril.

If you have more than one detached building on your property or an updated garage, you may need additional coverage above and beyond the standard 10%. Talk to a home insurance agent about scheduling an endorsement, which could raise your policy limits for your Other Structures protection.

Other structures coverage – what customers want to know

The best way to really get to know a certain coverage type is to see it in action. Here, you don’t have to file a claim to be in the know. Check out fellow customers’ questions to get a general idea of how your policy works. Click on the question below to find an answer from our experts.

During a recent windstorm, an old tree fell in our yard and crushed our detached garage. We need to replace it ASAP. Is this covered under our home insurance policy even though it’s not connected to our home?

 

Why is home insurance important?

Coverage Against Natural/Man-Made Disasters
Natural disasters such as floods, cyclones and earthquakes, often cause extensive damage to life and property. A home insurance policy will provide compensation for the loss/damage caused to your home due to such causes. Besides natural disasters, a home insurance policy also provides compensation for damages caused due to manmade hazards such as fire, theft, vandalism etc.

Compensation for Temporary Living Expenses
In case your home is deemed inhabitable due to severe damage, a home insurance policy will provide compensation for your temporary living expenses until your home is repaired or rebuilt.

Compensation for Damage/Loss of Assets
Besides covering your home structure, a home insurance policy also covers assets such as clothes, ornaments, electronic appliances, furniture etc.

Protection Against Liability
A home insurance policy also protects you against any liability arising out of accidental damage caused by you to a third party member within the confines of your property.

Types of home insurance policies

Building/Structure Insurance
To buy this type of home insurance policy, you need to be a homeowner. Structural insurance generally covers damage caused to the home structure as well as outdoor structures such as garages, and sheds.

Home Contents Insurance
A home content insurance covers damage/loss of your personal belongings such as clothes, furniture etc. This type of home insurance can be purchased even if you live in a rented space.

Home Insurance Valuation

Under home insurance, you will be compensated for damage to your home and property. The amount of claim you receive in case of damage is dependent upon the valuation of your home and assets. You can choose to insure your home based on two types of valuation.

Reinstatement Value
If you choose to insure your home on the reinstatement value, only the cost of construction can be recovered while claiming. The construction cost is inclusive of the material cost as well as labour cost.

Indemnity Value

If you have insured your house at indemnity value, you can claim the sum insured along with the total premium paid in case of loss and damage to your property. Additionally, the depreciation based on the age of the property will be deducted from the claim amount.

Does My Homeowners Policy Cover Gold and Money?

If you are a homeowner who keeps cash or gold bars (ingots) stashed in your home- make sure you know your homeowners insurance coverage for these types of items.

For example, most standard homeowners insurance policies will provide only about $200 worth of coverage for money, bank notes, coins, medals, bullion, gold bars (other than goldware) and silver (other than silverware).

For specifics on your policy, contact your homeowners insurance agent.

As always- if you are planning on keeping money, gold or other high-value items in your home a safe is strongly reccomended-otherwise- you might be left without coverage in the event of a loss. To be on the safe side, you might want to consider keeping your money, gold, bank notes and silver in a safety deposit box at the bank.