"What does homeowners insurance cover?"
Homeowners insurance will normally include the following 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 replacement value, it will be replaced. This is in place to give a buffer against inflation.
Coverage B – Other Structures
Covers other structures on
the property which are not used for business such as a detached garage. Typically limited to 10% of Coverage A.
Coverage C – Personal Property
Covers personal property,
with limits for the theft and loss of particular classes of items (eg, $200 for money, banknotes, bullion, coins,
medals, etc). Typically 70% of coverage A is required for contents.
Coverage D – Loss of Use/Additional Living Expenses
expenses associated with additional living expenses (i.e. rental expenses) and fair rental value if part of the
residence was rented, if you should have to vacate the home due to a covered loss while repairs are being made.
Covers a variety of expenses such as
debris removal, reasonable repairs, damage to trees and shrubs for certain named perils (excluding the most common
causes of damage -- wind and ice), fire department charges, removal of property, and credit card / identity theft
Specific exclusions will be stated in this section.
These generally include flood, earth movement, power failure, neglect, war, nuclear hazard, and intentional loss
In addition to the above, if your dog should bite the neighbor, or a guest slips and falls on
your property and breaks an arm, liability coverage is provided to pay for necessary medical treatment. These are
simple examples, but the coverage itself is much broader. Keep in mind, however, that liability coverage is
only applicable to non-owners. It will not provide payment for you as an owner if your dog should bite you or you
should fall and break a leg.
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