Home Owners
For most people, their home is their single most valuable investment and lifetime possession. The obligation taken on for paying for this investment can be therefore equally as large. Just think what would happen if your home were completely destroyed in a fire and you had no protection for its replacement. The loan would still exist, you would be under obligation to repay that loan, but the asset would be non-existent. Few of us have the resources to rebuild or even repair our homes if there is a loss of any magnitude. Homeowners insurance protects the Home Owner from a devastating casualty losses.

Homeowners insurance consist of several components . The first  and largest component is the coverage for Dwelling (Coverage “A” in the policy). The limit for the dwelling is determined by compiling essential information about the home and determining its current replacement value, or the costs that would be required to reconstruct the home today’s market.

The second component of homeowners policy is the Other Structures coverage (Coverage”B” in the policy). This limit is percentage of Coverage A and is automatically included in a standart HO3 homeowners package regardlessof whether you have property that would be insured within the section. Other structures are buildings that are not attached to or a part of your main home (i.e., garages, storage buildings, etc.).


The third component of a Homeowners policy is the coverage for your Personal Property (Coverage “C” in the policy). This limit is also a percentage of Coverage A, cannot be decreased from that percentage but CAN be increased. Your personal property is considered all of your personal possessions (other than motorized vehicles). Those possessions do not have to be in your home, they are insured at any location with the United States. Typically , these items are insured on a depreciated cost basis unless changed by endorsement.


The fourth component  of a Homeowners policy is the Loss of Use coverage. Again and finally, this limit is a percentage of Coverage A. If you are displaced from your home, temporarily or otherwise due to a casualty loss, you will incur costs of being out of your home. This component reimburses you for those excess costs which include a temporary place to live.
Homeowners insurance also includes Personal Liability Coverage (Coverage “E”) which is an aggregate limit for bodily insurance and property damage suffered by others, and Medical Payments to Others (Coverage “F”) which is a per person limit to take care of immediate medical expenses caused by a loss at your home. Homeowners insurance is considered an “all risk” policy but that can be misleading.Homeowners policies do have exclusions and limitations. Those need to be acknowledged and addressed by you and your agent.

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