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Types of Coverage in a Typical Homeowners' Policy

What basic coverages are available?

The most common basic coverages are: Property damage, contents insurance, additional living expenses, personal liability, and medical payments.

What does "property damage" cover?

Property damage coverage helps pay for damage to your home and personal property caused by such perils as fire, lightning, windstorm or hail. The perils of flood and earthquake are not covered. If you believe you need flood insurance and your insurance company will not provide it, you may obtain coverage through the Federal government's National Flood Program ("NFP"). To learn more about the NFP you can contact an insurance agent or contact the NFP at (800) 638-6620. You should carefully read your policy before you have a loss to determine exactly what types of losses will be covered.

What does "contents insurance" coverage include?

In general, the contents of your home and other personal belongings owned by you or family members who live with you will be covered under the policy in an amount equal to 50% of the limit of liability carried on your dwelling. However, high valued personal property such as jewelry and cameras should be scheduled on the policy so that you are adequately protected to avoid the possibility of these items not being fully covered at the time of loss.

What does "additional living expense" or "loss of use" cover?

Most home insurance policies provide for the necessary increase in expenses you incur if your home is damaged by an insured event and you cannot live there while repairs are being made or if you are denied access to your home by government order. The coverage is generally subject to duration limits and commonly covers any expense incurred by you so that your household can maintain its normal standard of living. In some instances, this coverage may include the costs of a motel, eating in a restaurant, or storing some of your property.

What Is "personal liability insurance" coverage?

Personal Liability Coverage protects you and all family members who live with you against a claim or lawsuit resulting from (non-auto and non-business) bodily injury or property damage to others and for which you become legally obligated to pay. Defense costs are included, but the insurance company has no duty to defend you after the limit of liability on the policy has been exhausted.

What does "medical payments insurance" cover?

Regardless of who is at fault, this coverage pays the reasonable expenses for others accidentally injured on your premises or the areas immediately adjoining your property such as sidewalks or alleys. Medical Payments Coverage does not apply to your own injuries or those of family members living with you or injuries arising out of activities involving a business that you operate out of your home, your intentional acts, or arising out of the rental of your premises.