What Property Does My Homeowners Policy Cover?
One of the more common reasons that Homeowners Insurance claims are denied by the insurance company is due exclusions or limitations in the policy. Understanding what kind of property your homeowners insurance does and does not cover will help you have a better insurance and claims experience.
The Insurance Services Office (ISO) is an organization that develops standard policy forms for insurance companies to use. Insurance companies can use these ISO forms as-is, they can modify the forms, or draft a version of their own. However, the ISO Homeowners 3 – Special Form can give us a good idea of what kinds of property coverages and exclusions you might expect to see in your homeowners insurance policy.
Coverage for Your Home
Your homeowners policy provides coverage for the structure of your home. You might see it called “Coverage A – Dwelling.” It may also provide coverage for “Coverage B – Other Structures,” which might include things like sheds and gazebos which are clear, separate structures from your dwelling.
A standard homeowners policy will provide coverage for the cost to repair or rebuild your home if it is damaged as a direct result of things like fire, lightning, windstorm, and hail. It’s important to read your policy to get a full picture of the coverages provided.
Coverage for Your Belongings
The contents of your home are also covered in your homeowners policy under “Coverage C – Personal Property.” Imagine you could pick your house up and turn it upside-down. The items that would fall through the roof would be considered your personal property – things like furniture, TVs, and clothing.
Coverage for Additional Living Expenses
If there is covered damage to your home that causes it to be unlivable, your homeowners policy provides coverage for additional living expenses under “Coverage D – Loss of Use.” It will cover the increase in living expenses while your home is being repaired or rebuilt. This might include the cost to stay in a hotel, laundry expenses, or other additional expenses to maintain your “normal standard of living.”
What Is Not Covered?
The homeowners coverage form will also include a list of exclusions. Typically, a standard homeowners policy will not provide coverage for damage caused by:
- Earthquake
- Flood
- Back-up of water through sewers or drains
- Overflow of a sump pump
- Wear and tear
- Coverage for motor vehicles
- Animals
- Ordinance or Law (the additional costs associated with demolishing, rebuilding, or renovating your home to bring it up to today’s building codes and ordinances)
However, you may have the option to purchase coverage back for some of these items. Many companies offer optional coverages like Back Up of Sewers and Drains and Ordinance or Law. You may also be able to buy a Flood Policy to provide coverage to your dwelling and belongs as a result of a flood. If you have significant items like jewelry, watches, or handguns, you may check with your agent about taking out specific coverage for those valuables.
If you have questions about your homeowners policy or are interested in looking at additional coverage options, your independent agent is a great resource! Your coverage needs are unique and an independent insurance agent can help you create a program to protect the things that are valuable to you.