Know Your Coverages

June 27, 2013 | Tower Hill Insurance

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The coverages on your homeowners insurance policy may seem like alphabet soup: A, B, C, D, E…. What are the coverages, and why are they important? Here’s a quick summary.

Coverage A: Anything involving the physical structure of your home, generally termed “dwelling.” Check with your insurance agent to be sure that you have adequate coverage, and that your policy has been updated to include recent home improvements. Your agent has access to Replacement Cost Estimate (RCE) software that can help in estimating whether or not your current Coverage A amount is adequate.

Coverage B: “Other structures,” Coverage B, is often the most confusing. Other structures are defined as those which are set apart from the dwelling by clear space or connected to the dwelling by only a fence, utility line, or similar connection. Other Structures that most homeowners have include your driveway, fencing, mailbox, and garden shed. Large-value Other Structures, such as a detached garage, gazebo, or pool building need special attention from your agent to be certain that you have enough Coverage B limit to replace them. Coverage A and Coverage B limits are not interchangeable, so let your agent know about all your outdoor property. A swing set anchored to the ground is a Coverage B item. The value of a screen enclosure attached to your home is included in Coverage A.

Coverage C: In a word, the “contents” of your home. If you flipped your house upside down, everything that fell would be contents. It is all the items that are not attached, or built-in, to your home. A complete home inventory will help you find out if your contents (Coverage C) amount is adequate, or if you need a Personal Articles Endorsement for some items. Here are some examples: your new diamond anniversary ring; great-grandma’s antique silver service and china set; the mini music recording studio in your garage; the coin collection you recently inherited from your great-uncle; or items that need a specific valuation such as an original painting or sculpture. After you finish your home inventory, or if you have questions during the process, check with your insurance agent to be sure that your policy includes the coverages you need.

Coverage D: If you have to live elsewhere temporarily due to covered damage to your home, you will need this coverage for your additional living expenses.