Homeowners Insurance: Different Levels of Coverage


For most people, their homes form their most expensive possession. You, however, have minimal control over various elements that might plague your property and render it useless. These typically include harsh weather elements, fire and mold. The ideal alternative to guarantee you are appropriately covered in case disaster strikes is to get a homeowners insurance policy.

You might have invested in many insurance policies in the past, but a home insurance policy from firms such as Amistad Insurance Services is a bundle of different coverage levels. The levels you will need for your property depends on the value of your home, and your mortgage lender and insurer’s requirements.

Here are the five coverage levels in homeowners insurance.

Coverage A

Hand covering the home

This is the highest coverage level and covers the structure of your property including the doors, floors, walls, fixtures and appliances. It is essential to understand the form of coverage A on your policy since there is a “broad” and “all perils” category. “all perils” coverage A covers everything in your property other than items that are specifically excluded. The most common exclusions in coverage A are deterioration and wear and tear.

Coverage B

This covers the structures that are unattached to your house or have a different foundation but form part of your property. These include the fences, guesthouse and sheds, among others. Most people ignore this coverage level, but it carries a heavy responsibility more so when expensive fittings or installation works are involved.

Coverage C

This level covers your personal property. In terms of homeowners insurance, this property encompasses all possessions you would take with you in a move.  While your personal property is adequately covered in natural disasters provided you pay the right premium, there is a limit on some personal items in case of a burglary on your property. These include expensive jewelry, trailers, watercraft, guns, cash and fine china.

Coverage D

This is an additional living expenses level. It covers the costs you might incur in case you are forced to seek alternative accommodation because your home is inhabitable after a natural disaster. You cannot recoup additional living expenses from an insurer if your property is undergoing a non-emergency renovation. The “reasonable” value of your costs depends on the rent of a similar property as your current home and your premium.

Coverage E

This level covers you and the members of your family in lawsuits involving property damage to your property or someone else’s or causation of injury. The insurer will hire a lawyer for your defense in the lawsuit. The company will also pay for the compensation or fines up to an amount set out in your policy.

Coverage levels A, B and C, are categorized by most insurers as property damage. There might exist other coverage levels other than the above depending on your insurer, but these are the primary ones that should influence your choice. A homeowners insurance will give you peace of mind. Without the right choice of coverage levels, however, you will not have much to fall back on if disaster strikes.

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