A homeowners insurance policycombinesproperty and casualty coverages in the samepolicy. A multi-peril policy offers numerousadvantages to consumers as it convenientlypackages a range of coverages under onepolicy and is normally cheaper than if all thecoverages were purchased individually.
Homeowners insurance is sold as a personalpackage policy designed to cover a broadspectrum of perils associated with owning orrenting a home. A peril is an event that causesdamage to property; two examples are fireand theft. Although insurance on your homeis not required by North Carolina law, if yourhome is mortgaged your lender may requirethe purchase of insurance on your home.Additionally, if you are a renter your landlordmay suggest that you purchase insurance tocover your personal property.
Homeowners insurance also protects youagainst liability for accidents that injureother people or damage their property. Thepolicy covers medical expenses for personsaccidentally injured on your property.
Most policiesdo not protect you againstlosses from floods, earthquakes, mudslides,mudflows or landslides. In some cases, your standard homeowners policy may also exclude windstorm or hail coverage, but you may be able topurchase a separate policy for these perils.Contact your agent to discuss your options for obtaining coveragefor these losses.The homeowners policy contains twosections. Section I provides propertycoverages (A, B, C and D) while Section IIprovides liability coverages (E and F). A brief description of the individual coverages follow:
Tab/Accordion Items
Coverage A provides major property coveragethat protects your house and attachedstructures if it is damaged by certain events.It also covers fixtures in the house suchas plumbing, heating, and permanentlyinstalled air-conditioning systems, electricalwiring and supplies on or adjacent to theresidence premises for use in the construction,alteration, or repair of the dwelling or other
structures.
The amount of Coverage A is normallyestablished by the market value, purchaseprice or other identifiers associated withestablishing the value of the dwelling.You should always carry an amount ofinsurance equal to a minimum 80 percentof the full replacement cost of the dwelling.Replacement cost is the amount it would taketo replace or rebuild your home or repairdamages with materials of similar kind andquality, without deducting for depreciation.
This coverage provides protection to otherstructures on the residence premises that arenot attached to the dwelling. Items coveredinclude detached garages, tool sheds, etc.Coverage B is normally limited to 10 percentof the Coverage A limit. However, you maypurchase more coverage for an additionalpremium.
You should always carry an amount ofinsurance equal to a minimum 80 percentof the full replacement cost of the otherstructures. Language in the policy contractstates that there is a reduction in theamount payable for a loss if Coverage B isnot a minimum of 80 percent of the fullreplacement cost of the other structures.
This coverage provides protection for thecontents of your home and other personalbelongings owned by you or family memberswho live with you. Coverage C is normally50 percent of Coverage A (if coverage is alsoprovided for the dwelling under the policy)or is subject to an established amount agreedupon by you and the insurance company.
Coverage is limited on certain types ofproperty that are especially susceptible toloss, such as cash, securities, jewelry, furs,manuscripts and stamp or coin collections.Additional amounts of insurance may bepurchased. You may want to considerscheduling these items separately. Ask youragent for specifics.
This coverage will help with additional livingexpenses if your home is damaged by a perilinsured against to the extent that you cannotlive in your home. These expenses include,but are not limited to, housing, meals andwarehouse storage.
It is important to note that your company willonly pay those additional expenses above andbeyond your normal and customary livingexpenses. Coverage D is normally limited to20 percent of Coverage A.
You must keep receipts for all additional livingexpenses and submit them to your companyfor reimbursem*nt consideration. All of theexclusions, conditions and specific languagecan be found in your policy.
This section of the homeowners policywill provide coverage in the event you ora resident of your household are legallyresponsible for injury to others. Coverage Ewill provide a defense and will pay damages,as the insurance company deems appropriate.There are some exceptions. The liabilitycoverage will not protect you in all situations,such as an intentional act. All of the exclusions
and specific language can be found in yourpolicy.
This coverage pays for reasonable medicalexpenses for persons accidentally injured onyour property. For example, if a neighbor’schild is injured while playing in your home,the medical payments portion of yourhomeowners policy may pay for necessarymedical expenses. The medical paymentsportion of your homeowners policy may alsopay if you are involved in the injury of anotherperson away from your home in some limitedcirc*mstances.
Medical payments coverage does not applyto your injuries or injuries of those that residein your household. It is not a substitute forhealth insurance. Business activities are alsoexcluded. All of the exclusions and specificlanguage can be found in your policy. Youshould check with your agent or insurancecompany to discuss the limit of medicalpayments coverage needed.
