Home Insurance

Coverage A – Dwelling

• Covers the value of the dwelling itself (not including the land). Typically, a coinsurance clause states that as long as the dwelling is insured to 80% of actual value, losses will be adjusted at replacement cost, up to the policy limits. This is in place to give a buffer against inflation. HO-4 (renter’s insurance) typically has no Coverage A, although it has additional coverages for improvements.

Coverage B – Other Structures

• Covers other structures around the property that are not used for business, except as a private garage. Typically limited at 10% to 20% of the Coverage A, with additional amounts available by endorsement.

Coverage C – Personal Property

• Covers personal property, with limits for the theft and loss of particular classes of items (e.g., $200 for money, banknotes, bullion, coins, medals, etc.). Typically 50% to 70% of Coverage A is required for contents, which means that consumers may pay for much more insurance than necessary.

Coverage D – Loss of Use/Additional Living Expenses

• Covers expenses associated with additional living expenses (i.e., rental expenses) and fair rental value if part of the residence was rented. However, only the rental income for the actual rent of the space is covered, not services provided such as utilities.

Additional Coverages

• Covers a variety of expenses such as debris removal, reasonable repairs, damage to trees and shrubs for certain named perils (excluding the most common causes of damage, wind and ice), fire department charges, removal of property, credit card/identity theft charges, loss assessment, collapse, landlord’s furnishing, and some building additions. These vary depending upon the form.

Exclusions

• In an open perils policy, specific exclusions will be stated in this section. These generally include earth movement, water damage, power failure, neglect, war, nuclear hazard, septic tank back-up expenses, intentional loss, and concurrent causation (for HO3). Additionally, flood damage is typically excluded under standard homeowners and renters insurance policies but is available as a separate policy from the National Flood Insurance Program (NFIP) or private insurers.