Insurance Frequently Asked Questions

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Home Owners Insurance

What Does The Homeowners Policy Cover?

The homeowners policy is a package policy designed for a single family home. Most packages include liability, dwelling property, personal property, medical payments and additional living expense coverage.

Policies do vary, however, in what events (perils) you are protected against. There are two general approaches: a named peril basis, which insures against a list of perils, and an open peril basis, which insures against all perils except those specifically excluded.

What Are The Named Perils?

Basic Coverage Perils: Fire; Lightning; Windstorm; Hail; Explosion; Riot or Civil Commotion; Aircraft; Vehicles; Smoke; Vandalism and Malicious Mischief; Theft; Breakage of Glass.

Broad Coverage Perils: All of the above basic coverage perils and Volcanic Eruption; Falling Objects; Weight of Ice, Snow or Sleet; Collapse of Building; Accidental Discharge of Water or Steam; Sudden or Accidental Tearing Apart; Cracking; Burning; or Bulging; Freezing; or Sudden or Accidental Damage from Artificially Generated Electrical Current.

What Types Of Property Are Covered By A Homeowner Policy?

On your residence premises, the real property will be covered. This includes the dwelling and any unattached structures including fences. Your Personal property is also covered. This includes the contents of your dwelling, clothing, furniture, appliances and all other normal personal belongings. Note: some items of personal property like jewelry, guns, furs, golf equipment, etc., may have a limit on the amount of coverage.
It may be necessary to put additional coverage on these items by scheduling them to the policy. Automobiles are not covered.

What Is "Actual Cash Value"?

When "actual cash value" is used in a policy, a policy owner is entitled to the depreciated value of the damaged property.

What Is Replacement Cost"?

When "replacement cost" coverage is used in a policy, a policy owner is
reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

How does the homeowner policy pay for loss damage to
a roof?

Generally, the roof, which is part of the dwelling, is covered on a replacement cost basis (less your deductible). However, homes with a very old roof or a severely damaged roof may have restrictions limiting coverage to actual cash value instead. In addition, some companies have policies that change the coverage from replacement cost to actual cash value after a roof gets to be a certain age (i.e. 10-15 years). Check with your agent to be sure what level of coverage you have on your roof.

Does the homeowners policy cover flood damage?

No, the homeowners policy specifically excludes water damage. This exclusion includes flood, surface water, waves, tidal water, overflow of a body of water, water that backs up from sewers, drains or sump pumps, water that seeps through the basement walls and floors. Note: Water damage caused by a broken pipe in the house would be covered. The National Flood Insurance Plan is the only source to get flood insurance for residential property. Your agent should be able to assist you if you need to carry flood coverage.


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