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
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
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.
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
Section II consists of areas E
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,
if the insured ruined a leather coat borrowed from a neighbor.