| Homeowners
Insurance Coverage
Dwelling Coverage:
This amount should reflect the replacement cost value of your home,
including attached structures, built in appliances, utilities, and wall
to wall carpeting. The HO-3 form covers most losses based on the replacement
cost of repairs less your deductible. Your dwelling must be insured
to at least 80% of the total replacement value. With minor exceptions
most losses are covered EXCEPT those caused intentionally or by neglect,
wear and tear, insect, vermin, rodents, constant or repeated seepage
of water or steam from within a household appliance or system, water
damages caused by pipes broken by freezing when home has been unoccupied
for 30 days or more, flood including water from sewer or drains and
tidal waves, collapse, earthquake, landslide, power failure off premises,
smoke - not sudden or accidental, illegal acts, war, and nuclear radiation.
Hint: You can buy some of these exclusions back by endorsement or
with a separate policy.
Other
Structures:
Automatically 10% of the dwelling limit. Provides the same coverage as for
the dwelling, paying the repair cost of all detached structures on your premises
when coverage is at least 80% of the replacement cost but, will not pay more
than the repair, replacement, or the limit of coverage purchased, or the actual
cash value of all structures that are not buildings, and all are subject to your
deductible. Examples include garages, fences, decks, swimming pools, and walls,
provided they are not physically attached to the home. Hint: You can increase
this coverage limit if needed. Personal
Property:
Automatically 50% of the dwelling limit. Covers the contents of your residence
whether they are at home, in transit, in storage, anywhere in the world subject
to your deductible. Losses are paid on an Actual Cash value basis (reflects depreciation).
Personal property is covered for damage caused by: fire or lightning, theft, freezing
of plumbing, weight of ice, snow and sleet, windstorm or hail, glass breakage,
explosion, sudden and accidental cracking, burning, bulging or tearing apart of
a steam, hot water, air conditioning system or appliance for heating water, water
or steam that accidentally discharges or overflows from a household system or
appliance, power surges, sudden and accidental smoke, vandalism or malicious mischief,
vehicles, aircraft, riot, volcanic eruption. There are special coverage limits
for certain property and excluded loss situations that are part of the policy
and not indicated here. Hint: You can increase this limit. You can add replacement
cost coverage by endorsement. Loss
of Use:
Automatically 20% of the dwelling limit. If a fire or other covered loss makes
it temporarily impossible to live in your home, this coverage pays for the increased
living expenses you incur until you can move back in. Hint: You can increase
this coverage by endorsement. Personal
Liability:
Pays up to your liability limits for damages awarded to an injured party
for your negligent actions. Coverage is extended to include defense
costs, expenses you incur to assist the company in their investigation
of a lawsuit, and expenses you incur to render first aid to others.
There is no deductible. Medical claims against you by employees (e.g.
daycare workers) of the household are excluded. (Consider an inexpensive
Workers Compensation policy.) Any business activity, past, present or
future for any insured is excluded. (Consider a Business Owners Policy
or the Permitted Incidental Occupancies Endorsement.) Auto and many
watercraft liabilities are excluded. Additional Liability coverages
include Claims Expenses for suits, Reasonable expenses of the insured
to $50 a day, Interest on the judgment, $500 for Damage to Others
Property and $1,000 for Loss Assessment for Association members.
Hint: You can purchase higher limits and broader coverage (personal
injury-libel, slander, false arrest) by endorsement. Consider an Umbrella
policy as well.
Medical
Payments:
Provides for emergency medical care for invited guests on your premises and to
a person off the insured location if caused by the activities of an insured, an
animal owned or in the care of an insured, or out of a condition on the insured
location. In Massachusetts coverage for any insured, regular resident, tenant,
and residence employee (in the course of their work and/or when they are off the
residence premises) is excluded. Hint: Get Workers Compensation for residence
employees. æ Common
Endorsements to Your Homeowners Policy Umbrella
Liability:
Extends a higher and broader liability coverage over your home and your auto policy
as a "second line of defense" after the underlying home or auto policy
liability is exhausted. Policies are non-standard and coverages will vary slightly
between insurers. In general, coverage will include defense and settlement costs
and awards for unintended bodily injury, property damage, mental anguish, sickness,
disability, slander, and libel caused by your negligence. Protection is worldwide.
You are required to purchase and maintain minimum underlying limits of liability
on your home and auto policies. These will vary by company and program. Replacement
Cost, Dwelling:
A guarantee that the company will replace your home with today's building materials
and methods even if that cost exceeds the limits on your policy. Replacement
Cost, Contents:
The company will reimburse you for the replacement cost of your damaged personal
property if you replace them after a loss. Actual Cash Value applies if the property
is not replaced. Scheduled
Property:
Insure valuables for extended risks including theft, loss, and mysterious disappearance
for an agreed amount without a deductible. An appraisal or purchase receipt within
the past three years is generally required. Breakage coverage can be purchased
for some fine arts. Common insurable categories are: Jewelry, Fine Arts, Silverware,
Golf Equipment, Musical Instruments. Earthquake:
Removes the exclusion for the loss of earthquake damage. A 5% deductible usually
applies. Ordinance
or Law:
Your homeowners policy is an indemnity policy. The intent is put you back into
the same place you were before your loss. If a city, state, or federal law requires
you to improve your home as you rebuild after a major loss (e.g.: if the enforcement
of new building codes makes you rewire the whole house), this coverage provides
the means to do so. Many policies give you 10% of the dwelling coverage automatically.
You can increase it to 25%, 50%, 75%, or 100% with this endorsement.
This is very important for older homes that have not been gut rehabbed and may
not meet current building codes. Loss
Assessment:
For condo owners or association members. If the association experiences a loss
covered by insurance and they exhaust their insurance limits, they may assess
the unit owners or association members. If that loss would have been covered under
your policy this part will pay your assessment, up to your limits. Important and
inexpensive coverage. Permitted
Incidental Occupancies:
Many people now work from a home office or run small businesses from their homes.
The unendorsed policy limits property coverage for property used in business for
any purpose, AT ANY TIME (yes even 10 years ago) to $2,500, property used
in business OFF the insured premises to $250 and there is no liability coverage
(yes, if UPS drops off a package for your business and slips and falls, then sues
- no coverage). Adding this endorsement removes these limitations for business
property on the premises and liability on the premises. Business property off
the premises is still limited to $250. There is no business liability coverage
off the premises. Hint: If you need it, and many do, purchase a Business Owners
Policy. Contact us for an evaluation of your specific needs. Watercraft
Hull Coverage:
The unendorsed policy limits coverage to $1,000 only when the boat is on the
residence premises, damage from windstorm or hail is covered only when the boat
is inside a fully enclosed building. Theft off the premises is excluded. No, your
auto policy will not pick up the pieces in a collision, just the trailer that
is insured for collision on your auto policy. This endorsement will cover the
physical damage or theft of the boat off the premises. Endorsement availability
is subject to limitations based on the length of the boat and size of the motor. Watercraft
Liability:
The unendorsed policy excludes coverage for Owned Outboards over 25hp,
Owned Inboard & Inboard/Outboard of any size, Rented Inboard & Inboard/Outboard
over 50hp, and Owned or Rented Sailboats over 26ft. This endorsement
can extend coverage to some excluded boats. Endorsement availability
is subject to limitations based on the length of the boat and size of
the motor and the driving records of the operators of the boat.
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