Homeowners FAQs

Look for discounts that apply to you. For example, many insurers will offer a discount when you buy both your automobile and homeowners insurance from them. Some insurers offer discounts if you have deadbolt exterior locks on all your doors, or if your home has a security system. Another easy way to save is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as five or ten percent. However, you should be sure you have enough cash on hand to cover the larger deductible in case of emergency.

Coverage C, the named perils coverage, applies to all your personal property (except property specifically excluded) at your described premises up to the limit of the policy. Usually property away from your property would be covered up to 10% of the contents limit.

(Note: this answer is based on the Insurance Services Office’s HO-3 policy.) Coverage A and B cover your dwelling and other structures on the premises subject to certain exclusions. On HO form 3 Special Form any peril NOT excluded would be covered.

You set the limit for Coverage A when you buy the policy. The Coverage B limit is usually equal to 10% of the policy limit on Coverage A. Coverage C covers losses to your personal property on a “named perils” basis, which means you’re covered for all the perils specifically named on your policy. The policy limit on Coverage C is equal to 50% of the policy limit on Coverage A. Coverage D covers extra expenses you may incur when the residence can’t be used because of an insured loss. The policy limit for Coverage D is equal to 20% of the policy limit on Coverage A. You choose the Coverage E – personal liability -limit when you buy the policy. The limit on Coverage F – medical payments to others – is usually set at $1000 per injured person. Individual companies may vary. Additional amounts of coverage can be purchased as needed.

Covered losses under a homeowner’s policy can be paid on either an actual cash value basis or on a replacement cost basis. When “actual cash value” is used, the policy owner is entitled to the depreciated value of the damaged property – so the older the item is, the less money you may receive for it. Under the “replacement cost” coverage, the policy owner is reimbursed the amount it costs to replace the property with something of a similar type and quality at current prices.

Homeowners Insurance is one of the most popular forms of personal insurance on the market. The typical homeowners policy has two main sections: Section I covers your property, and Section II provides personal liability coverage (to cover you in case of lawsuits arising from things that happen on and off your property). Almost anyone who owns or rents property should have this type of insurance.