YOU ASK:

What coverages does a home insurance policy consist of?

WE ANSWER:

It depends on the type of policy. There are six different types of ISO homeowners plans: HO-2, HO-3, HO-4, HO-5, HO-6 and HO-8.

The most common of these homeowners policies is Homeowners 3 (special form) which provides five types of coverages.

Home Insurance Policy Coverages

  • Coverage A of a home insurance policy covers damage to the insured's dwelling and any buildings attached to the residence premises, such as a garage. Coverage A only covers structures, but not land.
  • Coverage B insures destruction to or damage of other structures which are detached from dwelling, such as a barn, a stable or a tool barrack. The Coverage B amount of a home insurance policy is 10 percent of the amount of Coverage A. thus, if a house is insured for $500,000, the detached structures on the property premises will be insured for $50,000. As is the case with Coverage A, damage to land is specifically excluded.
  • Coverage C protects the insured against theft of or damage to personal property and is valid anywhere in the world. Borrowed property is also covered by this provision of home insurance. The insurance amount on personal property is 50 percent of the amount the dwelling is insured for. However, for belongings located off-premises, the insurance amount is only 10 percent of the overall home insurance amount. The following items are specifically excluded from Coverage C of a home insurance policy:
    • Motor vehicles;
    • Items separately covered, such as jewelry and furs;
    • Birds, fish and animals;
    • Credit cards;
    • Personal belongings of tenants or boarders;
    • Aircraft, hovercraft;
    • Rented property.
  • Coverage D insures the policyholder against loss of use of the premises due to a loss covered by the home insurance policy. The coverage amount is 30 percent that of Coverage A. If, for example, Lindsay rents her condo to a student and the condo gets flooded due to a pipe line break, Lindsay will lose some money that she would otherwise have got from rent, because the condo will be temporarily uninhabitable until the problem gets fixed. In this situation, Lindsay is entitled to receive the fair rental value of the premises.
  • Additional coverages included in home insurance policies:
    • Removal of debris;
    • Property removal;
    • Collapse of a building;
    • Lawns, trees, shrubs.
    • Glass;
    • Landlords'/Landlady's furnishings;
    • Assessment of loss, etc.
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