Learning Center
Standard Coverages
Building (Dwelling) Other Structures Personal Property Loss of Use Liability Medical Payments
with any insurance questions
Building (Dwelling) 1
This will cover damages to your home from things like fire, hail, etc. Be sure to check what is excluded
in
your policy as some types of damage, like flooding or mold, are specifically excluded. You can purchase
extra endorsements to get these special items covered as well.
1 - Building (Dwelling) Example
Let’s hope this never happens, but say your home burns to the ground, and you have $300,000 in building
coverage and a $1,000 deductible. If your home costs $290,000 to replace, the insurance will pay $289,000
and you will pay the $1,000 deductible out-of-pocket
Other Structures
This covers structures on your property that are not attached to your main home. Examples of these structures are detached garages, storage sheds, in-ground pools, gazebos, etc.
Personal Property
This covers damages and theft of your personal property. Personal property includes items like clothing, appliances, and furniture. There are usually special coverage limits for certain item categories like money, jewelry, golf clubs, firearms, video equipment, music instruments, and silverware - that’s why I ask about what you own in these categories. If you have special high value items, such as that beautiful engagement ring, consider getting additional coverage for these items.
Loss of Use
Also known as Temporary Housing Expenses, this covers your living expenses if you have to stay in a hotel or somewhere else while your actual home is being repaired from a loss covered in the policy. These additional costs can also include additional food cost, transportation, and other expenses that exceed what you would normally spend if you were still living in your home.
Liability 2
Personal Liability coverage pays for loss settlement and legal fees in the event that you or your family
members cause bodily injury or property damage to others. I know everyone can be clumsy at times :)
2 - Liability Example
You have a $500,000 liability coverage limit, and a neighbor slips on your steps and then sues you for
their injury, lost wages and other damages, and the court finds you liable for $300,000. Your Personal
Liability coverage would pay the $300,000, plus your legal fees. Let’s hope your neighbors aren’t this mean
Medical Payments
This coverage pays for medical bills when someone is injured by you personally, or on your property. Reasonable medical expenses are covered, regardless of fault, up to the amount of coverage you select. Still not a free pass to drunken boxing.
Typical Add-ons
Flood Insurance
Flood damage is usually not covered in your standard home insurance policy. Flood insurance is provided by the National Flood Insurance Program (NFIP). Flood insurance is required in high risk areas. While it isn't required in moderate-risk areas, it's still a good idea. Nobody dreams of a swimming pool in their basement, but it does happen. In fact, people in moderate-risk areas file more than 20 percent of all NFIP flood insurance claims.
Personal Property Replacement Costs
Your personal property loses value over time. Think about the price difference of buying something new vs. used off of Amazon. With furniture and appliances that you have owned for over 5 years, the difference between new and used value may be quite large. If you have to file a claim with the insurance company, you will usually get cash to replace the damaged property at the used cost. If you want to make sure you are being fully covered to replace all your damaged property with sparkly new property, you can add this endorsement. Definitely worth it in my mind.
Personal Umbrella
Personal Umbrella protects you if you have lots of savings or investments beyond just your primary home and want to protect these. This protection especially comes into play if someone tries to sue you for "everything you're worth".
Mold Coverage
What’s that smell? Mold is not covered in a Homeowners policy. Adding this coverage will cover property damage and liability losses arising out of fungi, wet or dry rot, or bacteria. This is an expensive coverage, because mold is expensive to remove. Usually involves tearing up carpet, drywall, or even replacing some part of the house itself.
Water Backup Coverage
Homeowners policies do not cover losses from water that overflows from sump pumps or water that backs-up through sewers or drains. This add-on provides coverage for such incidents. Sump Pumps are found in the basements of homes and are usually installed where basement flooding happens regularly. They are good at sending water away from the home when it rains/floods/etc.
Identity Theft Coveragee
This covers you and your family for expenses incurred as the direct result of identity fraud. These days, with everything going digital, our personal information is becoming more at risk. Getting personal information stolen online is scary! First and foremost, be safe with your information. Second, buy protection.
Personal Injury Coverage
This covers damages to you or your personal brand via libel, slander, false arrest, invasion of privacy, or malicious prosecution. Post a lot online? This may be a cheap way to get protected in case you unintentionally make someone so angry that they file a lawsuit against you.
Home Day Care Coverage
This adds coverage for your in-home daycare. Hope the kids are doing well!
Business Coverage
The typical homeowners policy does not provide much protection for business related activities. An add-on to a homeowners policy can provide you additional liability coverage for certain home-based businesses. To fully cover your business, we recommend looking at a Business Owner's Policy or BOP for short. Congratulations on being a business owner! Much respect.
Scheduled Personal Property
The following categories have limits on how much the insurance company will pay out. For example, if you have a really expensive engagement ring (bling bling), you should consider purchasing additional Jewelry coverage. Standard limits in special categories:
Jewelry - $1,500
Furs - $1,500
Electronics - $2,500
Musical Instruments - $2,500
Silverware - $2,500
Golf Equipment - $2,500
Fine Arts - $2,500
Postage Stamps - $2,500
Coins - $200
Firearms - $2,500
Tort Option
In some states, you can choose Limited Tort or Full Tort.
Limited Tort - allows you to seek payment for medical bills and lost wages in an accident, but
not from pain and suffering or other non-monetary damages (unless the injuries are defined as really
really bad - loss of a limb, permanent disfigurement/scarring, etc). Well that just got really dark… BUT
you can generally save ~30% on your premium by choosing Limited Tort.
Full Tort - has no restrictions on seeking recovery. This is the standard auto policy.
You rear-end a car and injure the driver’s back. Your insurance will pay for the damages up to your liability coverage limits
You get T-boned by another driver that has no liability coverage at time of accident, and need to stay in the hospital for 3 days. Your insurance will pay for your medical bills and lost wages as a result of the accident, up to your uninsured motorists coverage limit.
You have collision coverage with a $1,000 deductible, and you get in an accident with another car and cause $5,000 in repair costs to your own car. Your insurance will pay $4,000 in repair costs, and you have to pay $1,000 out-of pocket
You have comprehensive coverage with a $500 deductible, and you hit a deer (not Rudolf) causing $3,000 in repair costs. Luckily, the deer play’s for the Pittsburgh Steelers and walks away unscathed. Your insurance will pay $2,500 in repair costs, and you have to pay $500 out-of-pocket.
You have a $5,000 medical expenses coverage limit, and get into an accident and rack up $3,000 in medical bills. Your insurance will pay the full $3,000
Liability Coverage 1
Covers damage you do to other people and their property in an accident. It will cover things like medical
costs, lost wages, sickness, death, and property damage related to the accident. This coverage also pays
for pain and suffering that may result from the accident. Stay alert and drive safe!
1 - Liability Coverage Example
You rear-end a car and injure the driver’s back. Your insurance will pay for the damages up to your
liability coverage limits
Uninsured & Underinsured Motorists Coverage 2
If another driver hits you and it is their fault, but they do not have insurance and cannot pay you. This
protects you for medical bills, lost wages, and pain and suffering (depending on your tort option). An
estimated 1 in 8 drivers are driving without insurance! We live in a crazy world.
2 - Uninsured & Underinsured Motorists Coverage Example
You get T-boned by another driver that has no liability coverage at time of accident, and need to
stay in the hospital for 3 days. Your insurance will pay for your medical bills and lost wages as
a result of the accident, up to your uninsured motorists coverage limit.
Collision Coverage 3
Covers damage to your own car when you hit, or are hit by, another vehicle or object, regardless of who
is at fault. The deductible you select is the amount you must pay out-of-pocket before insurance pays
for this coverage.
3 - Collision Coverage Example
You have collision coverage with a $1,000 deductible, and you get in an accident with another car and
cause $5,000 in repair costs to your own car. Your insurance will pay $4,000 in repair costs, and you
have to pay $1,000 out-of pocket
Comprehensive Coverage 4
Covers you for non-collision related damages to your car, such as theft, vandalism, hail, fire, or
hitting an animal. Rudolf, nooooo! The deductible you select is the amount you must pay out-of-pocket
before insurance pays for this coverage.
4 - Comprehensive Coverage Example
You have comprehensive coverage with a $500 deductible, and you hit a deer (not Rudolf) causing $3,000
in repair costs. Luckily, the deer play’s for the Pittsburgh Steelers and walks away unscathed.
Your insurance will pay $2,500 in repair costs, and you have to pay $500 out-of-pocket.
Personal Injury Protection
Personal Injury Protection (PIP or "No-Fault" coverage) is mandatory in certain states (like NY). If you are a driver in NY, PIP covers $50,000 per person for:
Medical Expenses
Work Loss Benefits: 80% of lost earnings from work up to $2k per month for a max period of 3 years
$25/day for other reasonable expenses (for a duration of 1 year)
Death Benefit of $2k
To cover guest passengers when driving outside of your home state (NY), you must purchase "Additional PIP".
Additional PIP
Additional PIP allows you to add the following:
Out of State Extension - extends coverage at mandatory limits for guest passengers who are not residents of the state and get injured while driving outside of your home state (of NY)
Full Additional PIP - includes the Out of State Extension, plus doubles the coverage per person ($100k), doubles the Work Loss Benefit ($4k per month), and doubles Other Reasonable Expenses ($50/day)
Medical Expenses 5
Pays for your medical and rehabilitative expenses from an accident, regardless of who is at fault. This
coverage pays before your health insurance policy.
5 - Medical Expenses Example
You have a $5,000 medical expenses coverage limit, and get into an accident and rack up $3,000 in
medical bills. Your insurance will pay the full $3,000
Lost Income
If you can't work or lose income as a result of your accident, this coverage will generally pay up to 80% of your lost gross income (up to your policy limits).
Lease Loan Payoff
If your vehicle is totalled in a crash, the insurance will pay the difference between the settlement amount and the amount you owe your lender (usually up to 25 percent of your car’s actual cash value). Only consider this coverage if you lease your vehicle or have a loan. This way if your car is destroyed you won’t owe a ton of money to the lender for a car that no longer works.
Roadside
Coverage for roadside repairs or towing services when your vehicle breaks down due to mechanical or electrical issues, a dead battery, a flat tire, a lock-out, or if you run out of gas. Watch that gas light!
Rental
Insurance pays for a rental car while your vehicle is being repaired. This coverage is available if you have Comprehensive and Collision coverage.
Accidental Death
If you die in a motor vehicle accident (within 24 months), your family receives compensation up to your coverage limit. Dark.
Funeral Expenses
Insurance pays for funeral, burial or cremation expenses if you die as the result of a car accident. If you want your ashes launched into outer space, you may need additional coverage.
Disclaimer: These coverage definitions and examples are based on ISO standard forms. Coverage definitions may differ from carrier to carrier. We suggest reading your policy to understand the specific details.