The document outlines the various standard coverages included in homeowners insurance policies, such as dwelling protection, personal property coverage, liability, and medical payments. It emphasizes the importance of adequate coverage limits and explains specific details on each type of coverage, including optional enhancements and restrictions. Additionally, it briefly mentions flood insurance and its limitations under the National Flood Insurance Program (NFIP).

1. Anatomy Of Homeowner Coverage
Wayne Salley
Associate in Risk Management

2. Standard Coverage’s On Homeowners Policies
A B C D E F
Home Other Contents Loss of Use Personal Medical
Structures Additional Liability Payments to
Living Others
Expense
$500,000 10 - 20% of A 50 - 75% of A 20% of A, # $50,000 to $1,000 to
of Months, $500,000 $50,000
Unlimited
Cost to Hardscape, Clothes, Additional Legal defense Emergency
Rebuild pools, appliances, expenses and medical bills
Home storage electronics, incurred judgment for third
sheds, art, jewelry while unable costs party injuries
detached to live in your regardless of
garages home due to fault
a covered
loss

3. Dwelling Coverage - Coverage A
This home insurance coverage protects your home and any structures attached directly to it. Ideally, the amount of homeowners insurance
coverage you carry should equal the cost of rebuilding your home after a total loss.
Other Structures - Coverage B
This homeowners insurance coverage covers other structures set apart from the dwelling on the residence premises, such as a detached
garage. This coverage applies up to the limits provided in your policy and can be increased if necessary. Most policies automatically provide a
limit equal to 10% of your dwelling coverage amount.
Personal Property - Coverage C
This home insurance coverage protects your personal belongings, such as furniture, clothing and appliances. Most policies provide a limit of
liability equal to 50% to 70% of the dwelling coverage amount. Certain possessions may be excluded or have only limited coverage. You can
also purchase additional coverage to provide enhanced protection for valuable items and other special possessions.
Loss of Use - Coverage D
This homeowners insurance coverage is available when you cannot live in your home due to a covered loss. It pays reasonable and customary
living expenses up to the limit provided in your home insurance policy.
Liability - Coverage E
This homeowners insurance coverage protects you in two ways. First, it provides for your legal defense against a liability claim (lawsuit).
Second, it will pay any court judgments against you for covered losses, up to the policy limit.
Medical Payments - Coverage F
This homeowners insurance coverage pays emergency medical bills for anyone injured on your property or any injury caused by a member of
your family or a pet regardless of where it happens. All bills are paid, up to your home insurance policy limit, whether or not you're legally
responsible.

4. Dwelling Coverage - Coverage A
This home insurance coverage protects your home and any structures attached directly to it.
Ideally, the amount of homeowners insurance coverage you carry should equal the cost of
rebuilding your home after a total loss.
• Is What It Is
– Policy limit is maximum paid
• Extended Replacement Cost
– Policy limit is increased by a % for total losses
• 10 to 100%
• Guaranteed Replacement Cost
– Home will be rebuilt with like and quality materials
regardless of policy limit
• Co-Insurance Clause
– Limit must be 80% of actual replacement cost

5. Other Structures - Coverage B
This homeowners insurance coverage covers other structures set apart from the
dwelling on the residence premises, such as a detached garage. This coverage applies
up to the limits provided in your policy and can be increased if necessary. Most
policies automatically provide a limit equal to 10% of your dwelling coverage amount.
• Can be increased if percentage limit is insufficient.
• Some companies will allow decreases.

6. Personal Property - Coverage C
This home insurance coverage protects your personal belongings, such as furniture,
clothing and appliances. Most policies provide a limit of liability equal to 50% to 70%
of the dwelling coverage amount. Certain possessions may be excluded or have only
limited coverage. You can also purchase additional coverage to provide enhanced
protection for valuable items and other special possessions.
• Actual Cash Value vs Replacement Cost
– Depreciated settlement or replacement settlement.
• Replacement Cost
– ACV until actually replaced.
• Limited coverage:
– Jewelry
– Silverware
– Money & Securities
– Furs
– Fine Arts

7. Liability - Coverage E
This homeowners insurance coverage protects you in two ways. First, it provides for
your legal defense against a liability claim (lawsuit). Second, it will pay any court
judgments against you for covered losses, up to the policy limit.
• Defense costs outside of policy limit
• Meets minimum requirements for Umbrella Coverage

8. Medical Payments - Coverage F
This homeowners insurance coverage pays emergency medical bills for anyone injured
on your property or any injury caused by a member of your family or a pet regardless
of where it happens. All bills are paid, up to your home insurance policy limit, whether
or not you're legally responsible.
• Purchase maximum available
• Cost is minimal
• Avoids liability judgments

9. Flood Insurance
• NFIP Maximum Limits
– $250,000 Home
– $100,000 Contents
• Definition- a general and temporary condition of partial or complete inundation of two or
more acres of normally dry lane area or two or more properties(at least one of which is your
property) from:
– Overflow of inland tidal waters;
– Unusual and rapid accumulation or runoff of surface waters from any source;
– Mudflow; or
– Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining
caused by waves or currents of water exceeding anticipated levels that result in a flood as defined above.
• Contents coverage for basements is limited and does not include drywall, paneling, carpeting,
or other floor coverings, clothing, electronics and furniture.
– Finished basements with playrooms and media centers are not covered.
For a complete guide to NFIP Flood Insurance go to www.fema.gov or contact me and I will email you several reference documents.