clock November 30, 2016 comments No Comments flowchart Homeowners InsuranceOur Blog tag Liability
a house covered by a rhode island homeowner's insurance policy

Your Rhode Island homeowner’s insurance policy includes many sections, and it may be difficult to understand what each element protects. This post explains the 6 sections of coverage on a typical homeowner’s policy so you can work with your insurance agent to protect yourself and your home properly.

Dwelling

Dwelling coverage provides compensation in the event that your home is damaged or destroyed. This coverage applies to physical damage to the building itself. The dwelling limit shown on your policy is the maximum amount you can receive to repair or rebuild your home in the event of a claim.

Most policies cover perils such as damage from fire, smoke, lightning, vandalism, falling objects, and impacts from vehicles or aircraft. However, an unendorsed homeowner’s policies do not cover damage from earthquakes or floods caused by nature. You need an additional policy or an endorsement to protect you. Don’t presume your policy protects you – check with your agent to ensure adequate coverage.

Your policy may also have specific limitations for particular damage. For instance, policies often limit how much you can claim for downed trees or replacing damaged shrubs, trees, or your lawn. They may also restrict how much you can claim for debris removal or increased construction costs related to building code ordinance or law changes.

Other Structures

This section of your policy covers structures that aren’t connected to the dwelling. These structures include a detached garage, work shed, gazebo, swimming pool, or fence. Typical coverage is 10% of the dwelling limit. If you have a large detached structure such as an oversized garage with a loft or a large barn, you should let your agent now so that this coverage can be increased beyond the automatic 10% coverage.

Personal Property

Personal property includes items in your household and things you and your family use, own, or wear. It includes appliances, furniture, electronics, household goods, clothing, and more. Policies limit the amount based on a percentage of the policy’s dwelling limit, which is typically between 50% and 70%. If you own many items, this may not be sufficient coverage. Fortunately, you can increase your personal property coverage, without affecting the dwelling limit, for a reasonable amount.

Unless your policy provides personal property replacement cost coverage, the insurance company will only pay you the depreciated value of your personal belongings. Depending on the expected life of the items in question, this could severely impact your claim. For example, your 10 year old stove could be damaged in a fire but the company would depreciate the item and you would receive compensation that is much less than what it would cost to actually go out and replace the stove with a brand new one. Now think about how much depreciation could be deducted if you had a major house fire and everything in your home is deprecated. For this reason, we strongly recommend that every homeowner add personal property replacement cost coverage to their policy. This ensures that all of your items can be replaced in the event of a claim and that you’re not left feeling short changed.

Personal property insurance may also limit specific items such as jewelry, furs, musical equipment, computers, and firearms. Once again, you can add an endorsement to your policy to include coverage for these items when necessary.

Loss of Use

If you are unable to live in your home due to a covered claim, this section of your homeowner’s insurance policy provides money for your living expenses during this time. It also has a limit; typically 20% of the policy amount. It covers expenses such as hotel bills, meals in restaurants, and laundry charges. Policyholders retain receipts and submit them for reimbursement later.

Liability

This is an important section in any insurance policy, because it protects you against the costs that can arise from unintentional bodily injury or property damage to others while on your property or that you may be found legally liable for. It prevents you from paying out of pocket for legal and court fees should the unexpected occur and you get sued. Your policy may also cover you for damages from accidents that happen when you’re away from home, too.

Medical

Your homeowner’s insurance policy specifies how much it pays per person if someone injures themselves in an accident on your premises. This coverage comes into play if you, a family member, or your pet causes injury or damage, regardless of legal liability.

Rising medical costs mean that minimum coverage is seldom sufficient. You can increase your coverage for a nominal fee.

Adequate coverage is important and the difference in your premium is well-worth your peace of mind. Review your policy with your agent to avoid any scary surprises should you ever never to file a claim.


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