Home Insurance Policy
so what does a homeowner's policy actually cover ?
in this article we're going to dive in and actually go over the coverages of a house policy and a couple of other little pieces that you should know about a home policy i just want to put a quick disclosure out there i do recommend you always talk to your agent to get some exact finite details
so let's dive right into the home coverages the first part is coverage a there's nothing to it it's a b c d e and f so you've got a which is your dwelling if you own a mobile home it's your mobile home if you own a stick built house it's a it's that house so anything that you insure that's a dwelling a that is going to be what's called replacement cost most companies won't let you go below 100 of the value of the home and it's not the value that you're thinking of it's not what you would sell your house for it's how much you're gonna have to pay somebody to rebuild it if the whole thing got demolished that is typically gonna be that higher limit.
let's just use in this example a standard 250 000 house i might only be able to sell it for 200 but it might be worth 250 to rebuild the second piece is coverage b then coverage b is your other structures so that's basically anything that's not directly attached to the house your deck is bolted onto the house so that's not part of that if you have a pool attached to that it's not typically part of the house unless there's a concrete patio that goes to the pool in some of those cases that coverage b or even coverage a will cover that pool but if it's not directly connected or part of the home then something like that is going to be a separate structure or other structure fence shed anything that's a patio pergola anything that you have separate from the house that's coverage b you're typically going to have a little bit of extra coverage for that that way if something there happens you're typically going to have the coverage be at 10
so then if we go into coverage c that's going to cover your personal property your tv your couch anything that you own that is in the home that has some sort of value to it it doesn't cover usually media so if you have some special tax software on your computer and the computer gets fried they're not necessarily going to cover the the actual uh pieces of that there are other coverages you have to go after to get that stuff that's more of a business thing than it is in your personal policy so you've got all the main stuff .
but the biggest thing you want to make sure that you have in that covered c is that you have full replacement cost that essentially means that you're going to get today's market value for that item if you have a 10 year old couch it's only worth 100 at a garage sale i'm not going to be able to replace that couch for that amount so if i have the full replacement cost it's going to cover that full value maybe it's a thousand dollar couch or a 1500 couch now i'm going to get that amount if that's the value of that replacement in the store that leads us into coverage d d is called loss of use which is living expenses they also call it other living expenses usually in hyphenated and what that does is that pays for anything that you can't do or use at the house.
what i mean by that is let's say the kitchen catches fire it's going to take three months to rebuild the kitchen that means i'm probably going to move out of the house and rent another house well i don't have time to go to work and go to the house and mow the lawn and then come back and mow the other lawn so i'm going to pay someone to mow the lawn i'm probably going to pay because maybe the cows that i'm at doesn't have a great kitchen i'm probably going to go to fast food for the next week and a half while i get everything set up i'm going to have all these extra expenses like gas going further than i normally do checking on the house making sure things are secure all of that so that's additional living expenses you'll typically see that close to 30 percent of the policy .
so there's usually enough coverage in there to take care of you coverage e and f are kind of a combined piece they are separate you've got coverage e which is your liability limits and you choose these coverages so you either do a hundred thousand three hundred thousand five hundred thousand all the way up to a million or more it really usually caps out at a million what that is is that's for anything that you're liable for the roof caves in on somebody if someone slips on some ice on the steps that you didn't get to but you normally do if there's some sort of thing that you're not negligent on now if you ignore the steps and they're always slippery and the mailman comes and slips on them they're probably going to deny that claim because now it's going to show that you were negligent you didn't take care of that property same thing goes for sidewalks so all of that stuff is they're going to sue you for well what they've done is they've added an additional coverage which is going to cover what's called medical payments and that's coverage f so what that's going to do is that's kind of what they call hush money so it's basically uh it's kind of a bad term to say because we tell they just never to say that it's not really hush money it's kind of a dirty term but what that does is that allows them to take a thousand or five thousand dollars you choose either a thousand three thousand five thousand the two most common are one in five so let's say i had five thousand med pay and you slipped on my steps you broke your arm it's four thousand dollars for that cast they're gonna give you that four thousand even the five thousand if you can prove that you need it uh just to get you going they're gonna say okay you're not gonna sue us great here's five thousand dollars please sign this waiver have a great day now that is why they call it hush money because it's essentially easy to get that money they're going to send it out as quick as possible to try to get somebody not to go after that liability because if you have that five hundred thousand dollars worth of liability then that's gonna hurt them a lot worse than paying five thousand dollars there you have it those are the main pieces of an insurance policy for home the additional parts that i didn't go over was the major piece that most people miss it's called water backup and sewer and pump so if you guys don't know what that coverage is i'm actually going to link that right here so go ahead and watch that video also there is a couple things i wanted to touch base on so if you're a renter you're going to see something not as an ho3 so an h03 is your typical home policy it's a stick build house then you've got an h04 which is a renter's and then you've got an h05 which is also home but it's more specialty we're not going to get into that and then we've got an h06 which is a condo so if you look at the top of your declarations page make sure you're talking we're talking about an ho3 there's also additional things that you do need to know about as far as like jewelry goes or furs and guns and all that stuff