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ABCs of your homeowners insurance policy

 Insurance policies can be as complicated as an IRS form -- exclusions, inclusions, deductibles and more. Here's a breakdown of the parts and protections offered by a good homeowners policy.

Every homeowners policy is a variation of a standard policy used throughout the insurance industry. Any coverage beyond the standard is considered a unique feature from your insurance carrier. The standard policy consists of two sections and six areas of coverage, known as A through F.

Section I consists of areas A, B, C, and D:

  • Coverage A (Dwelling) applies to the structure you inhabit. This would cover the dwelling, attached structures (such as a garage) and permanently installed property (such as wall-to-wall carpeting).

  • Coverage B (Other structures) applies to other structures on your property. This would cover a tool shed or a garage that is not permanently attached to your home.

  • 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 amount.

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  • Coverage D (Loss of use) applies when the dwelling is uninhabitable due to a covered loss. It would cover additional living expenses (those necessary to maintain a normal standard of living) or fair rental value (income lost from renters).

Section II consists of areas E and F:

  • Coverage E (Personal Liability, Bodily Injury and Property Damage) is similar to Personal Property coverage. This covers you 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 expenses stemming from injuries that occur to others while they are on your premises.

Coverage for a handful of other things is automatically provided in every policy, as well, including the costs involved in defending a claim, first aid when a third party is injured, and damage to the property of others. The last item is a no-fault coverage that could be applied if, for example, the insured ruined a leather coat borrowed from a neighbor.

-- Posted: Sept. 23, 2003

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