Making choices regarding home insurance can be easy when you understand the fundamental structure of the standard homeowner insurance policy. Unlike medical care insurance, house insurance has been standardized. This makes it much easier to compare apples and apples.
Most house insurance policies are based on the ISO Home owners 3 Special Form it is also known as an HO 3. Certain states require certain amendments and there are differences between the different home owners insurance carriers policies. However, even though you may not find identical policies, the policies will be more similar than different so long as the policy is an HO 3 policy.
A Coverage – Dwelling
The A coverage defines how your residence premises and certain attached structures are insured. If you have an attached shed it is included in the A coverage.
B Coverage – Other Structures.
These are structures that are not attached to your residence premises or that are separated by a clear space or are connected only by a fence wall, wire or other similar structure. A detached shed would be covered by this section of the policy.
C Coverage – Personal Property
Personal property includes most of the property that you own that is not considered real property. Property that is attached to the land is considered real property. Property that is attached to real property is also usually considered to be real property.
A built in air conditioning system will be considered real property. A window unit will be considered personal property.
The personal property section of your policy will cover more than just the posessions in your home. It will also cover things of yours that is in other locations. However, there are limits and restrictions. Your cars will be specifically excluded. There will be limits on cash and jewelry. There will be other limitations and restrictions on your house policy.
D Coverage – Loss of Use
Your house policy will likely pay your housing expenses if you are not able to live in your house due to a covered peril. You may be able to stay in a motel while your residence is made liveable again and have those costs covered by your policy.
E Coverage – Personal Liability
A standard HO 3 homeowner policy includes liability coverage. This can pay if someone is injured on your property. It can also pay if you accidentally injure someone far away from your property. There are limitations on this coverage, but it probably covers more situations than you realize.
F Coverage Medical Payments to Others
Section F Medical Payments to Others is similar to the liability coverage section. However legal liability is not required for payments to be made. This section provides limited coverage in situations where an insured person causes an injury to another person. Its purpose is to pay for the small stuff without requiring costly legal red tape. The personal liability section of your policy is there to pay for the larger more costly situations.
Home insurance is an important coverage. It covers not only damage to your home, but can also cover damage to your personal possessions, reimburse you for the housing costs while your home is being made liveable again and can pay others if that you might injure due to a negligent act.
Understanding the basic structure of a homeowner insurance policy can help you to compare policies, since the fundamental structure of most house insurance policies will be the same regardless of which carrier you make your purchase through.
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