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What a Homeowner's Policy Provides
Although they are infinitely customizable, a homeowner’s insurance policy’s certain standard elements define what costs the insurer will cover.
Homeowner’s insurance policies generally cover destruction and damage to a home’s interior and exterior, the loss or theft of possessions, and personal liability for harm to others.
Homeowner's Policy Options
Dwelling protection
One of the basic coverages of a homeowners insurance policy is dwelling protection, which helps cover the home’s structure. (foundation, walls, roof, etc.). Dwelling protection may also cover other structures attached to the home, such as a garage or a deck, against certain risks.
Other structures protection
Most homeowners insurance policies include coverage for other structures on your property but separate from your home, like a detached garage, tool shed, or fence.
Personal property protection
Homeowners insurance doesn’t just help cover damage to your home. It also provides coverage for the personal belongings within. For example, if electronics are stolen, a fire damages your furniture.
Personal property protection may help pay to repair or replace your belongings if they are damaged or destroyed by a covered risk. Many insurers offer optional coverages that further protect the stuff you own. For example, you may buy extended coverage for items like jewelry, watches, and furs with values above your personal property coverage limits.
Liability protection
A typical homeowners insurance policy provides liability coverage when someone not living with you is injured while on your property. For example, if a visitor trips over your broken porch step. Bodily injury liability coverage may help pay for your resulting legal expenses or the visitor’s associated medical bills if you are at fault. You may increase your liability coverage limits by adding a personal umbrella policy. Your TrueCoverage agent can explain what options are available to you.
Coverage limits and deductibles
Remember that each homeowner’s policy coverage is subject to a limit — the maximum amount your policy would pay toward a covered loss. You may adjust your coverage limits to your needs. For example, the value of your home and belongings and how much it may cost to repair or replace them if they are damaged or destroyed by a covered risk.
Three Ways to Insure the Structure of Your Home
There are three basic levels of coverage: Replacement Cost, Extended Replacement Cost/Value, and Actual Cash Value(ACV).
Replacement Cost
Insurance pays the policyholder the cost of replacing the damaged property with no deduction for depreciation. Still, it is limited to a maximum dollar amount
Extended Replacement Cost
An extended replacement cost policy covers costs up to a certain percentage over the limit (usually 20%). This gives you protection against such things as a sudden increase in construction costs.
Actual Cash Value
This covers replacing your home minus depreciation costs for age and use. For example, suppose the life expectancy of your roof is 20 years, and your roof is 15 years old. In that case, the cost to replace it in today’s marketplace will be much higher than its actual cash value.
What's not covered by homeowners insurance
Even the broadest homeowners insurance policy won’t cover everything that could go wrong with your home. For example, you can’t intentionally damage your house and expect your insurer to pay.
Policies also typically exclude damage from other causes, such as:
Flooding, including drain and sewer backup
Earthquakes, landslides, sinkholes
Infestations by birds, vermin, fungus, or mold
Wear and tear or neglect
Power failure
Ask Your TrueCoverage Agent About Recommended Coverage Options
Replacement cost coverage for possessions
Extended or guaranteed replacement coverage for the structure
Building code upgrades
Sewer and drain backups
Inflation-guard
Umbrella coverage if you have a lot of assets to protect or the property has high-risk features such as a pool
Riders for jewelry, collectibles, etc.
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