Home insurance, also commonly called hazard insurance or homeowners insurance, is the type of property insurance that covers private homes. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one’s home, its contents, loss of its use, or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home. It requires that at least one of the named insured occupies the home.
It is a multiple-line insurance, meaning that it includes both property and liability coverage, with an indivisible premium, meaning that a single premium is paid for all risks. Standard forms divide coverage into several categories, and the coverage provided is typically a percentage of Coverage A, which is coverage for the main dwelling.
The cost of homeowners insurance often depends on what it would cost to replace the house and which additional riders—additional items to be insured—are attached to the policy. The insurance policy itself is a complete contract, and names what will and what will not be paid in the case of various events. Typically, claims due to floods are excluded. Special insurance can be purchased for these possibilities. Insurance must be updated to the present and existing value at whatever inflation up or down, and an appraisal paid by the insurance company will be added on to the policy premium.
A Homeowners Policy Covers
- Your home and its attached structures (up to 100% of the policy limit)
- Other structures on your property, such as detached garages, tool shed, pools and any fences you may have. (up to 10% of the policy limit)
- Your personal property, including furniture, appliances and clothing (usually up to 50% of the policy limit)
- Additional living expenses which are costs above your normal living expenses if a loss forces you to move temporarily from your home (up to 20% of the policy limit)
- Personal Liability Insurance – which pays for legal damages if you or members of your family are sued for negligent acts that result in accidental injury to another person’s or damage to another persons property. (The basic Liability limit is $100,000, but we recommend higher limits up to $300,000 or $500,000.)
- Medical payments to people other than household members injured in or around your home. (The basic limit is $1000, but we recommend at least $2,000 limit for very little additional cost.)
NOTE: When a policy is written on a Replacement Cost basis, if you have a loss, the Company pays to repair or rebuild your house based on current costs. Even if the cost exceeds the policy limit.
What Types Of Loses Are Covered And What Is Excluded
Your house and other structures for any cause of “direct physical loss”; except those specifically excluded by name.
Your Personal Property Is Covered For Losses Caused By:
- Fire, lightning or smoke
- Windstorm or hail
- Theft and vandalism
- Damage caused by vehicles
- Rupture or frozen plumbing, heating or air conditioning systems
- Riot or civil commotion
- Weight of snow or ice
- Falling aircraft or falling objects
Some Of The More Important Exclusions Are
- Earthquake – including landslide and “earth sliding”
- Flood – including tidal water and wave spray, water that backs up through sewers and drains and underground water that seeps or leaks into your home.
- Neglect of the insured to use all reasonable means to save and preserve the property when a loss occurs.
- War and Nuclear Hazard.
Coverage for earthquake can be added for an additional premium.
The cost to add earthquake runs between .35 and .40 per $1,000 for the average home of frame construction and up to .60 per $1,000 for a custom built home. Rates for homes of brick construction are substantially higher. Therefore, if you carried a $200,000 on your home, the additional premium for earthquake coverage would be between $70 and $80 per year. The deductible is usually 2% of the amount of the loss and never less than $250.
Flood coverage can be purchased through the National Flood Insurance Program. Call 781-447-5561 anytime with specific questions or contact us via the web.
NOTE: Homeowner policies do not provide Liability Protection for claims arising out of any Business Pursuits. Therefore, if you have an office in your home, conduct a Daycare Service or operate any other type of business from your home, it is necessary for you to purchase Liability protection for these activities on a separate policy or endorsement