The Six Standard Types of Coverage: What’s Included & What’s Not
ASHLEY URBAN
Home Insurance today covers six standard types of coverage. They are broken down from A to F, and your insurance company bases your premium calculations on them. Knowing the coverages, along with what is included in specific coverages, what can be added, and what is NOT covered can maximize the benefits.
STANDARD TYPES OF COVERAGES:
Coverage A: Dwelling Replacement Cost (RC) - Covers what it would cost to completely replace a house or loan amount, whichever is highest. This type of coverage should never be for actual cash value (ACV) except for an old roof.
Coverage B: Other Structures - 1% to 10%+ of Coverage A - Covers any detached structures. This limit can be increased or additional premium.
Coverage C: Contents - 50% to 70% of Coverage A - Covers personal belongings such as furniture, clothes, dishes, etc. This type of coverage should also always be the replacement cost (RC) and not its actual cash value (ACV).
Coverage D: Loss of Use - 20% to 30% of Coverage A - Pays for living somewhere else if there is a covered loss in the current home and cannot live there.
Coverage E: Personal Liability - Covers the insured party from an unintentional accident that injures an individual or damages their property while on the insured party's property.
Coverage F: Med Pay - 1-5k - Covers medical expenses, despite fault or liability, for guests if they are injured on the insured party's property, and in certain cases covers people who are injured off the insured party's property. However, it does NOT cover healthcare costs for you or other members of your household.
ADDITIONAL STANDARD ENDORSEMENTS THAT CAN BE ADDED TO AN HOI POLICY FOR EXTRA PREMIUM:
Identity Theft
Water Back-up
Replacement Cost Personal Contents
Additional Dwelling Replacement Cost - 25%
Ordinance/Law - 10%
OTHER COMMON COVERAGES THAT MAY BE OPTIONAL OR REQUIRED:
Earthquake
Flood
Buried Utilities (i.e. sewage line)
Matching Siding
Special Coverage on Contents
Home Maintenance (not to be confused with a home warranty)
Home Sharing - Short Term Rentals
Trust Endorsement
Personal Injury
COVERAGES THAT ARE NOT COVERED:
Settling or Foundation Issues
Issues Caused by the Construction of the Home
Wear and Tear of Home
Home Warranty Items
Acts of Terrorism
DEDUCTIBLE OPTIONS (MOST COMMON):
$15,000 All Perils
1% Wind/Hail
$2,500 Wind/Hail - wind/hail deductibles have the most impact on your premium. All perils (everything else) have a minimal to mild impact on your premium depending on the carrier and the risk involved.
