Home insurance has many different benefits and features, but the actual coverage is split into two policy sections. These sections protect you from the perils defined in the policy.
Division I
A - Accommodation - accommodation and attached structures
B - Other structures - Unattached structures
C - Personal property - Contents of the accommodation
D - Loss of use - additional life costs
The list of perils against which a homeowner policy insures are fire and lightning, windstorm or hail, explosion, riot and civil unrest, aircraft, vehicles, smoke, vandalism and malicious mischief, theft, falling objects, accidental discharge of water and steam, sudden and accidental tearing, freezing and volcanic eruption.
Section II
E - Liability Coverage - Personal liability provides coverage in the event of a claim or suit against the insured due to bodily injury or property damage caused by an occurrence.
F - Medical Payments - Medical payments provide coverage to others in the event an individual is injured on the premises and requires medical treatment.
These are the basic coverage benefits of a homeowner's policy. The next step in the process is knowing how much insurance you need to buy. The actual face amount is usually determined by an insurance replacement cost calculator. The calculator needs several types of data in order to give you a quote. This will often require the square footage of your home as well as information on items that increase the value of your home like air conditioning and fireplaces. There will likely be a question about what percentage of your basement is complete.
Home insurance policies have two ways to settle a claim. It will be settled on an actual cash basis or on a replacement cost basis. The actual cash value settlement will assess the replacement cost and subtract any depreciation due to age or use. Actual cash value policies are usually purchased from older homes. Replacement cost settlements replace loss with kind and material quality without depreciation.
