Home Insurance Coverage Classifications
If you are planning to get insurance for your home, then you need to be aware of the different home insurance coverage classifications. This is because every home owner is different and has different needs. These coverage classifications allows the insurance companies to customize your insurance package. Here are some of the most common classifications and an explanation of each one.
Coverage A – Dwelling
This type of insurance insures the structure of your property. The value of your home is covered in the event of it being damaged or destroyed by natural disasters like fire, wind or hail. Dwelling coverage does not include the value of your land. Flood and earthquake coverage must be purchased separately
Coverage B – Other Structures
Under this classification buildings other than your home are covered. Structures that are included are garages, sheds and all other detached structures. Coverage is typically 10% of the dwelling coverage. Home owners can however negotiate for coverage by speaking to an insurance agent.
Coverage C – Personal Property
This type of coverage will insure the content of the including furniture, clothing, art and other personal belongings. Everything inside your home fits under the personal property classification. To determine how much home insurance personal property insurance you may need, you should do an inventory and calculate the value of your belongings.
Most insurance companies allocate between 50% and 70% of insurance on the dwelling to coverage on your belongings.
Coverage D – Loss of use
The home insurance loss of use classification covers any costs that a homeowner may accrue as a result from being displaced from his or her home. These costs include rental expenses, hotel costs, and sometimes even restaurant bills. In some cases, transportation costs may also be reimbursed. There is typically a time limit for the home insurance loss of use coverage period.
Homeowners who rent out their homes can seek fair rental value coverage, which fits under the loss of use classification. Fair rental value coverage provides reimbursement to landlords who lose their tenants after a covered disaster renders the home uninhabitable. In other words, it provides the insured individuals with coverage for the loss of rent.
In addition to these basic coverings protection is also available for liability and medical payments. This type of policy will protect you from lawsuits in the event that someone is injured while visiting your home or sustains an injury or property damage as a result of your family or pets.
Medical Payments to Others
This classification provides coverage for accidents and injuries experienced by others on your property, in the event that they do not sue you. Whereas liability covers lawsuits and the payouts awarded to the other party, medical payment coverage provides good faith coverage for any medical bills accumulated as the result of an accident or injury on your property, without a trial. Medical payment coverage is only for the injuries of others. It does not cover the injuries of the homeowner or household members.