With 2015 upon us, many people are setting goals related to personal finances, which makes this a great time to review your homeowner’s policy with your agent to ensure you have the coverage needed to protect you, your family and your belongings. As a homeowner, it is important to know what your policies cover and don’t cover. To begin this task, one must understand what is actually included in an insurance policy. Your homeowner’s policy generally consists of the following items:
The Declarations Page of your policy (usually the first page) presents a summary of your coverage. (It is still important to read your policy to fully understand the details of your coverage.) The Declarations Page contains the following items:
The definitions part of your policy defines terms and explains important concepts contained in your insurance policy. If a policy definition differs from normal usage for a term, the definition in the policy prevails. For a listing of the most common insurance terms, visit Insurance Terms on our website.
Section I – Property Coverage of your policy describes what is and isn’t covered by the property provisions of your homeowner’s policy. It explains the types of property coverages, lists the specific perils that you’re insured against (such as damage caused by fire, theft, and hail), describes the exclusions from coverage (provisions that eliminate coverage for specified exposures), and conditions that you must meet for coverage to apply. There are four categories of property coverage:
If an instance of damage, injury, theft, or expense falls within one of these categories, you’ll be covered by your policy as long as you’ve met the conditions of your policy and no exclusions apply. Qualifying for coverage under the policy means that Access Home Insurance will reimburse you for your financial loss in excess of your deductible, up to your specific coverage limit. In some cases, you may increase your coverage limits for an additional charge; these are called endorsements.
Endorsements provide protection for your home beyond the limits that are covered for certain losses. For example, if your policy only covers $5,000 for jewelry and you own $10,000 in jewelry, you may purchase additional coverage for the additional $5,000. Precious artwork and other expensive property can also be covered with an endorsement. Speak with your insurance agent to determine if you need additional insurance. Your agent will help you determine the value of your possessions, estimated annual costs and deductibles of the endorsements for your consideration.
Like Section I, Section II – Liability Coverage of your policy describes types of coverages, exclusions from coverage, and conditions that must be satisfied. This section focuses on personal liability and medical payments to others for certain bodily injuries and property damages suffered by others in connection with your property.
How much will you receive after a loss? Your policy contains a paragraph describing how the amount you can expect to receive from Access Home Insurance will be determined if a covered property loss occurs. Below are the most common options for calculating payments:
Replacement cost: This is the amount needed to replace or rebuild your property or repair damages using similar materials to what you had before.
Actual cash value: This is the amount needed to replace or rebuild your property, less depreciation. Keep in mind that you’ll need to satisfy a deductible (i.e., pay a certain amount out of pocket) before Access Home Insurance reimburses you for a loss.
Please note: The above information defines what is typically found in most homeowner policies. The terms and conditions of your specific policy may vary. For a listing of key insurance terms, visit Key Info on our website. Your agent can also help evaluate your coverage. If you don’t currently have an Access Home Insurance residential homeowner’s policy and would like more information, ask your agent or visit Find an Agent on our website.