Home insurance, also commonly called hazard insurance or homeowner’s insurance is the type of property insurance that covers private homes.   It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory.  For each policy, there are typically 5 classifications of coverage:

  • 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.
  • Coverage B – Other Structures.  Covers structures around the property, that are not connected to the home and are not used for business. Typically limited at 10% to 20% of the Coverage A, with additional amounts available by endorsement.
  • Coverage C – Personal Property.  Covers your belongings ie., furniture, clothing, electronics.  Typically limited at 70% of the coverage A value but can be increased if needed.  There are some limitations to more valuable or hard to replace items.  You should speak with your agent to understand the limitations for some of these valuable items.
  • Coverage D – Loss of Use/Additional Living Expenses.   Covers expenses associated with additional living costs in the event your home is not fit to live in due to a covered loss.
  • Coverage E – Comprehensive Personal Liability.  Protects you in the event a claim or suit is brought against you for damages because of bodily injury or property damage.

How much coverage do I need?

You need enough insurance to cover the cost of rebuilding your home at current construction costs. Don’t include the cost of the land. And don’t base your rebuilding costs on the price you paid for your home. The cost of rebuilding could be more or less than the price you paid or could sell it for today.

How do I take a home inventory and why?

Would you be able to remember all the possessions you’ve accumulated over the years if they were destroyed by a fire? Having an up-to-date home inventory will help you get your insurance claim settled faster, verify losses for your income tax return and help you purchase the correct amount of insurance.  The following link is a useful tool in getting your inventory ready: http://www.knowyourstuff.org/iii/login.html