Residential Insurance Coverage

Residential Coverage Type - Dwelling/Coverage A

A dwelling is a building occupied principally as a private residence. In property insurance a dwelling policy may state or restrict the number of families allowed coverage (generally one to four families). The dwelling coverage also includes structures that are attached to the dwelling.

Residential Coverage Type - Rental Property

Homeowners policies only cover owner-occupied residences. If an owner rents the home/property to others, they need a landlord package policy . The landlord package policy normally includes coverage for loss of rents.

If a landlord package policy is not available, an alternative would be to purchase a dwelling fire policy to cover a home that is not owner occupied. However, the insurance company should be advised how the home is occupied.

If a room or a portion of the home is rented out to others, the insured should check with his/her agent to determine the coverage needed.

Residential Coverage Type - Other Structures/Coverage B

Coverage B covers structures not attached to the dwelling. Coverage is normally 10% of the Dwelling Coverage.

The other structures coverage is a standard part of most homeowners' policies. This type of policy is referred to as a "package policy ." Therefore, the Other Structures portion cannot be deleted or removed.

A dwelling fire policy is more restrictive than most homeowners' policies and may not cover other structures or provide liability coverage, and will cost less.

Before making any decisions, discuss options with an insurance agent or company.

Residential Coverage Type - Pools

In-ground pools are considered to be like the foundation, and damages to the structure of the pool are covered. If a tree or debris cracked the walls or floor of the pool, or the concrete decking surrounding the pool, the homeowners’ policy should cover repair costs. However, if damage was caused by water, usually undermining, or pop-up caused by water pressure, there is no coverage . Also, the wording of the insurance policy will determine whether the pool is covered under the dwelling or other structures coverage.

Above-ground pools are considered to be an "other structures", similar to a shed or detached garage and should be covered if the policy provides for "other structures" coverage. Damage caused by water is excluded.

Residential Coverage Type - Personal Property/Coverage C

Some people refer to this as ”contents coverage ”. It covers personal property located on the residence premises and can extend to some property located off the premises such as a mini storage or located at another residence. However, property located somewhere else, may have limitations on the amount of coverage (normally 10% of coverage C). The amount of insurance is normally 50% of the dwelling coverage.

Items such as: jewelry, watches, furs, guns, silverware, coin and stamp collections, computers, musical instruments, etc., are sufficiently covered under your homeowner’s policy. Most policies have a pre-set limit of coverage on these items. Higher limits can be purchased by contacting your agent.

Your insurance company may require an appraisal or a receipt from the original purchase for some of the higher priced items. Since insurance policies can vary from company to company, the limits placed on these items could vary as well. You can find a list of the personal property and the coverage limit in your policy.

Residential Coverage Type - Personal Property Off-Premises

Most homeowners policies cover personal property when it is stored off of the insured's premises, whether stored in a mini warehouse, storage shed or when traveling.

Coverage is also extended to college students living away from home, but who are still considered to be a resident of their parent's or guardian's household. Coverage is also extended to personal property stored at another residence.

However, property located somewhere else, may have limitations on the amount of coverage that is available. Normally, the limitation is 10% of the amount of coverage for personal property. However, coverage limits may vary depending on circumstances, so check with an agent to obtain answers to specific questions.

Residential Coverage Type - Additional Living Expense/Coverage D

Provides indemnity for ”additional” expenses of an insured who must live elsewhere due to a loss to the insured residence by a covered peril . Pays only reasonable ”excess” expenses until the property is habitable. Coverage is normally limited to a certain percentage of the dwelling coverage amount. ISO forms are generally 30%.

Some policies provide ALE coverage if a civil authority prevents access to the dwelling. Since policy forms are different from company to company, the insured should always consult their own policy provisions or agent .

Residential Coverage Type - Personal Liability/Coverage E

Personal Liability covers the insured for damages they are legally liable for because of bodily injury or property damage. The company may also pay costs of defense, premium on appeal bonds, interest on judgments, prejudgment interest , and reimbursement of expenses to aid in defense, including up to $250 per day for loss of earnings. Included in Coverage E is the reimbursement for expenses incurred for first aid to others at the time of an accident. (Normally, a limit will apply for this coverage.)

Additionally, coverage for damage of property belonging to others may be provided under coverage E unless covered under Section I. (Normally, a limit will apply for this coverage.) The most common limits of liability are: $100,000 and $300,000. Other amounts are normally available

Residential Coverage Type - Home Daycare Liability

Homeowners Residential Property insurance does not provide coverage for liability for claims arising out of, or in connection with, the operation of a home daycare business.

The insurer shall be under no obligation to defend against lawsuits resulting from such claims, unless it is specifically covered in the policy , or covered by a rider or endorsement for business coverage.

Residential Coverage Type -Medical Payments to Others/Coverage F

Coverage for reimbursement of reasonable medical expenses for injuries sustained by a third party either on or off the insured’s premises as a result of the activities of the insured’s.

Residential Coverage Type - Law and Ordinance

This endorsement would pay for the enforcement of any ordinance or law regulating the construction, repair, or demolition of a building or structure. For example if your home was only 50% destroyed but your local ordinance required the whole home to be torn down and rebuilt, this coverage would pay, up to the amount purchased, toward tearing down and rebuilding the undamaged portion of your home. Companies are required to include this coverage at 25% of the dwelling limit and you must sign a waiver to remove the coverage. In addition to the 25%, the companies must also offer a limit of 50%. You may be able to purchase additional limits. Reference: Florida Statutes 627.7011

Residential Coverage Type - Replacement Cost

"Replacement Cost" coverage means the policy will pay up to the limits for the replacement of a damaged or destroyed home, or personal property, without deducting for depreciation . This is different from Actual Cash Value (ACV), which pays for the value of the damaged item, less depreciation.

In the event of a loss for which a dwelling or personal property is insured on the basis of replacement costs, the insurer shall pay the replacement cost without reservation or holdback of any depreciation in value, whether or not the insured replaces or repairs the dwelling or property.

Reference: Florida Statute 627.7011Residential Coverage Type - Inflation Guard Endorsement

Inflation guard is an endorsement added to most property insurance policies which provides that the policy limits will increase a certain percentage at regular intervals, usually annually. The inflation guard endorsement helps the amount of your coverage keep up with current construction costs. (Also see, Replacement Value vs. Market Value?)

Residential Hurricane Deductible - Mandatory

The hurricane deductible is mandatory for both personal and commercial residential risk . Every personal and commercial residential risk will have a minimum of two deductibles "all-other-peril " and "hurricane." Reference: Florida Statutes 627.701

Residential Premium - How Rates are Determined

Property Insurance Premium Rates are developed using several factors:

The location of the property (territory): city, county, zip code can be used to establish the territory.
The amount of coverage: The amount of insurance on the dwelling.
The fire protection class: The rating of the fire department in that territory, 1-10 established by ISO. Class 1 rating represents exemplary fire protection, and Class 10 indicates that the area’s fire-suppression program does not meet ISO’s minimum criteria.
Mitigation Credits: Less credits given for items to reduce hurricane/windstorm losses.
Theconstruction of the dwelling: Is the dwelling constructed of wood frame, concrete block, or brick.
Some insurance companies charge a higher premium according to the age of the dwelling.
Some insurance companies charge a higher premium if you did not have insurance prior to their policy (no prior coverage).

Also see: Mitigation Brochure