Decoding Your Home Insurance Policy

Let’s admit it: home insurance policies can be lengthy and difficult to understand. More often than not, you need a fine-toothed comb to get through them. The solution to this problem is not to forego reading your home insurance policy and hope for the best. It’s best to be informed to the fullest extent. Sometimes your agent may not alert you of things that you might find relevant to know, or you may not know where to look in your policy for a certain piece of information. Your home is an investment piece that needs to be routinely maintained. Here’s how to decode your California home insurance policy.

Review the Declaration Page

First things first, the declaration page needs to be read. The declaration page spells out your coverages as well as personal and home information. The information on the declaration page includes things such as your policy number, policy period, coverage types and policy limits.

Property Coverage Overview

  • Section 1- Property Coverage: This section goes over what’s covered and not covered.
  • Coverage A – Dwelling: This section covers your home as a whole. It really deals with the structure of the home itself. When it comes to the structure of your home, you should get enough insurance to cover the cost of rebuilding it.
  • Coverage B – Personal Property: For most cases, personal property coverage is a percentage of your policy limits. Most policies cover 50 to 70 percent of the amount of structure coverage that you have.
  • Coverage C – Loss of Use: This component of a home insurance policy will pay for additional costs that you incur when it’s necessary to live away from your home due to a damage from a covered peril. The coverage will keep you afloat for up to 12 months while everything is being figured out. While coverage varies by insurer, most policies will offer 10 percent of your home coverage with additional coverage available for a price.
  • Additional Information: You also need to be aware of additional coverage, losses insured and losses not insured. It’s important to know about extra coverages, what perils are covered, and what’s not covered by your policy.

Liability Coverage Overview

  • Section 2 – Liability Coverage: This part describes your liability coverages offered by your policy. It lets you know what type of coverages you have in the event that there is in an injury on your property and you get sued. The liability portion of your policy covers legal fees, an injured party’s medical bills, and any damages awarded to the injured party. Most homeowners policies start at $100,000 and can go up to $500,000. It’s recommended to have $300,000 to $500,000. If you need extra coverage, get an umbrella policy. It basically bolsters all of your current home insurance coverage.

If you’re ever unsure about anything in your home insurance policy, reach out to your California homeowners insurance agent. They’d be more than happy to help you understand the details of your coverage.

About ISU / The Olson Duncan Agency

At ISU -The Olson Duncan Agency, our goal is to provide clients with a total solution, not just a quote or a contract. We provide businesses and individuals with insurance and risk management solutions, and we aim to provide real value and build trustworthy, long-term relationships with our clients. To learn more about our services, give us a call today at (310) 373-6441 to speak with one of our professionals.

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