What are all the different parts of the homeowners policy?
While policies can vary depending on what the homeowner chooses to purchase, the common parts of a homeowners policy will be:
- Coverage A – Dwelling
- Coverage B – Other Structures
- Coverage C – Personal Property
- Coverage D – Additional Living Expenses
- Coverage E – Personal liability
Dwelling coverage provides insurance for damage to or destruction of the home itself. This coverage is not on renters policies because landlords or the building management company is responsible for the rented structure, whereas renters are only responsible for insuring their possessions inside that structure. In addition, dwelling coverage is limited to interior damage for condo policies because the condo association insures the overall building.
Other structures coverage is designed to cover buildings on the homeowner’s property that are not attached to the main dwelling, such as a detached garage. You will not have this coverage on a renters policy or condo policy.
Personal property coverage insures your possessions that are not permanently affixed to the structures, like furniture and clothing.
Additional living expense coverage will provide for the added costs that often arise after a covered event, for example, if you must pay to stay in a hotel while your home is being repaired. Keep in mind this cost is considered an additional expense because you will need to continue paying your mortgage even if your house has been damaged and is uninhabitable.
Finally, personal liability insurance protects you in the event of a claim against you for injury or property damage claimed by others. The coverage extends to you beyond just the home and will protect you from liability claims that arise out of activities virtually worldwide.