Insuring Your Home: The Types of Coverage in Your Policy

Home insurance is sold as a package policy. It covers both property damage and liability coverage. Florida law does not require homeowner’s insurance, but most people want to insure their home because its an important investment to them. Also, lending companies typically require homeowners insurance to issue a mortgage on a property.

Normally, a homeowners’ insurance policy provides coverage for the following:

• Coverage A: Structure (the dwelling itself) This part of a policy pays to repair or rebuild a home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in the policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear.

• Coverage B: Other structures (like sheds and fences) This includes structures that not attached to the property such as a garage, tool shed or gazebo.

• Coverage C: Personal property (the contents of the structures) Furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage for 50 to 70 percent of the amount of insurance on the structure of a home.

 • Coverage D: Loss of use (also called Additional Living Expense or ALE) This pays the additional costs of living away from home if a house is inhabitable due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while the home is being rebuilt. Coverage for additional living expenses differs from company to company.

• Coverage L: Personal Liability covers against lawsuits for bodily injury or property damage that policyholders or family members cause to other people. It also pays for damage caused by pets.

 • Coverage M: Medical Payments to Others is liability coverage for medical expenses of visitors accidentally injured in your home, regardless of if the accident was your fault. This coverage does not apply to you or any person living with you.