Coverage Explanation

Homeowners Insurance Coverage Explanation

Listed below are different coverages available on a homeowners policy.

Please click on the title for further definition.

Dwelling Value

The value listed for your home should be the current replacement cost value of the home.  The replacement cost is the amount needed to replace or rebuild your home or repair damages with similar kind/quality materials.  Most insurance companies use Marshall & Swift/Boeckh replacement cost estimators  when determining the value of the dwelling.  Replacement cost is not to be confused with market value,  which is what the current value of your home would be if you were to put it up for sale.

Other Structures

This coverage is for “outbuildings” located on the premise that are separate from the home, such as a shed, gazebo, swimming pool, or private garage.  This does not cover a building used for business purposes. Typical insurance policies must give you a minimum of 10% of the value of the home in “other structures” coverage.  Many companies offer 20% of the value of the home in “other structures” coverage.

Personal Property

This coverage affords protection for property you own or use.  Coverage is provided both on and off   premise.  Typical insurance companies must give you a minimum of 50% of the value of the home in personal  property coverage.  Many companies offer 75% of the value of the home in personal property coverage.  There is a limit of 10% of our personal property coverage extended to student’s property while away at school.  As many insurance companies have different exclusions, it is best to check the policy language with your company regarding what is/is not covered.

Loss of Use

This coverage is also known as “Additional Living Expense.”  It provides you with the money necessary to maintain a normal standard of living should you have to temporarily live away from your premise due to a covered loss.  Only extra expenses, those over and above your normal everyday living expenses, are paid under this coverage Personal Liability Losses that occur as a result of personal actions or the condition of your premise are paid out under personal liability.  The standard homeowner’s policy must have a minimum of $100,000 in coverage although higher limits of coverage are available.  A single limit of liability covers both property damage and bodily injury.

Medical Payments

Accidents caused by the personal acts of the insured or by pets are covered under medical payments.  This coverage does not apply to the insured or family members living with the insured. Medical payments pay up to the policy limit for all reasonable medical expenses for each person injured regardless of legal liability.  The minimum limit of coverage on a homeowner’s policy is $1,000 and higher limits are available.


Homeowners Quote Worksheet (PDF)