Homeowners Insurance Coverage Classifications In The USA

Homeowners insurance policies vary from country to country, insurer to insurer, US state to US state, and (when customized) from individual to individual. But in many countries, including in the USA, there are standard coverage classifications and typical coverage limits you should be aware of. Why? Because these are the nuts and bolts of the average standard homeowners insurance policy in the US, and your insurer will likely offer something very similar.

All standard policies will offer property damage protection for the house, detached structures, and at least some of the building’s contents in the form of personal property protection. And the standard, basic policy will also include liability cover, disaster cover, loss of use reimbursements, and more.

Below, we’ll look at the 6 core coverage classifications for homeowners insurance, and then mention some of the major ways you can customize your policy.

Coverage Component One: Main Dwelling
The value of your house (dwelling) is the main property damage coverage component of any homeowners policy. The value of the land is not included, just the building.

You can set your own coverage level here, but usually, you need to insure your dwelling at 80% of the total value. If you do, that’s typically good enough for full replacement value reimbursement on all damage to the building – up to the total limits of the policy.

Coverage Component Two: Detached Structures
All other buildings and permanent structures on your property are also usually insured in a homeowners insurance standard policy. This can include the garage, sheds, fences, decks, patios, and more.

The coverage limit here is usually from 10% to 20% of the limit set for the main dwelling.

Coverage Component Three: Personal Property
Much of your personal property kept inside the insured building will also be covered by your homeowners policy. There may be exclusions or limits on particular high-priced items, however (like expensive jewelry) unless you add extra cover.

A standard policy will normally cover qualified personal property losses up to 50% to 70% of the limit on the main dwelling. You will be reimbursed based on cash value or replacement cost, depending on the stipulations of your policy.

Coverage Component Four: Loss Of Use
When you are forced out of your home temporarily while it’s being repaired, you are bound to have extra living expenses that pile up on you, due to the loss of use of your home.

Loss of use cover will reimburse you for rent, transportation, food, and certain other expenses arising from the experience of temporarily being forced out of your home.

Coverage Component Five: Personal Liability
For non-residents of your home (visitors only), there is usually a degree of personal liability cover included in any homeowners policy. This will help pay for legal expenses and judgments against you due to an accident that occurs on your property.

A large percentage of personal liability payments go to cover dog bite based lawsuits.

Coverage Component Six: Medical Payments
When an accidental injury to a non-resident occurs on your property, regardless of negligence issues, homeowners policies will cover resultant medical expenses of the injured party.

This is the “other half” of homeowners’ liability coverage.

Of course, you can add extra cover too, adding riders to extend coverage-types and/or coverage amounts. To learn more about what your homeowners insurance policy can cover, contact Flagler County Insurance Agency today with all of your homeowners insurance related questions!