clock February 15, 2019 comments No Comments flowchart Homeowners InsuranceOur Blog tag Liability

a box of files, including an insurance policy that's hard to understandIn Rhode Island, homeowners insurance protects your home and possessions from perils and liability claims. However, coverage, exclusions, and limits vary widely between insurers.

The following outlines the basics of typical homeowners insurance policies, but insurance is a very complicated industry. If you don’t understand what’s in your policy, ask questions. You don’t want to discover you’re not covered when you need coverage the most.

Policy Types

These are the two most common homeowner policy types.


HO-2 policies are “named peril policies” which only protects you from specific risks listed in the policy. These usually include fire, lightning, weight of snow, ice, and sleet, burst pipes, theft, and vandalism. Any damage caused by events other than those listed on your policy are usually excluded from coverage.


HO-3 policies are the most common type of homeowner insurance policy which covers all perils, except those specifically excluded. Common exclusions include flooding, earthquakes, mudslides, sinkholes, war, terrorism, and nuclear accidents.

This coverage protects your home, attached structures, your belongings, and you from personal liability if you accidentally injure someone or damage their property.



Dwelling coverage protects you from the financial implications of damage or destruction to your home’s structure. You need sufficient coverage to cover the cost of rebuilding your home including upgrades, not the market value of your house or your mortgage balance.

Other Structures

This part of the policy protects other buildings such as a detached garage, shed, gazebo, fence, etc.

Personal Property

Generally, personal property is anything in your home that isn’t permanently attached such as your clothing, furniture, and appliances. Most policies assign a percentage of your dwelling coverage as the policy limit (typically 50 to 70 percent).

To establish an accurate value, you should prepare a detailed home inventory and present it to your agent for review. Many high value items require additional coverage. Otherwise your policy may limit a claim to $2,500.

Additional Living Expenses or Loss of Use

This coverage pays for the additional cost of living elsewhere when you can’t stay in your home after a covered event, such as a fire. For instance, if you’re forced to eat out after a kitchen fire your insurance would pay the added cost up to your policy limit. Most policies provide 20 percent of your home coverage.

Personal Liability

Personal liability coverage protects you from the costs associated with injuries or damage you cause to someone else. The injury might occur on your property or in some cases you can be liable for causing an injury off your property (for example, you’re golfing and the club flies out of your hands and injurs someone). If you’re found personally liable for injuries or property damage covered under you home policy, your insurance carrier will pay legal fees, and damages awarded to the other party for their medical bills or damaged property.

The minimum liability coverage on a policy is $100,000, but that often isn’t enough. Most insurance experts recommend at least $300,000 to $500,000. If you have many assets, you may need an umbrella policy too. Umbrella coverage gives you even higher liability limits and It kicks in when a claim exhausts your homeowners policy’s limit, personal auto policy limit, etc.

Additional Coverage

This section describes additional coverages such as replacing landscaping after a covered windstorm, paying for temporary repairs to prevent further damage after a loss, and debris removal coverage to haul away construction debris after a fire or covered loss.

Losses Insured

This section describes which perils the policy covers and the conditions that must apply to qualify as a loss.

Losses Not Insured

Review this section carefully as it the one most people don’t understand. If you need clarification, ask your agent. Common exclusions include flooding, earth movement, mold, and fungus.

Declaration Page

The declaration page provides a summary of your coverage, your home, and your personal information. Check for errors and ensure you’re receiving the coverage you agreed to with your insurer such as your deductible, premium, discounts, and whether your policy provides replacement or actual cash value costs, etc.

Some policies have separate deductibles for wind damage or hurricane damage and there’s a huge difference between replacement cost and actual cash value if you need to file a claim. If you don’t understand something in your policy, ask for clarification.

When it comes to protecting your home and your family, rely on an independent insurance agent like Loiselle Insurance. They’re experts who compare policies and narrow your choices for best value. Your coverage levels are extremely important, so buying strictly on policy cost could be a very expensive mistake.

Your agent at Loiselle Insurance will recommend riders or endorsements to close insurance gaps in a typical homeowners policy. For instance, sewer or drain backups aren’t covered under these policies. Your agent will also help you protect high-ticket items and align your dwelling coverage with your home’s rebuilding value.

Make an appointment, bring your home inventory, and answer all questions honestly. Independent insurance agencies like ours are your advocate – we work for you to tailor coverage to your needs.


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