Topic: How to Understand your           Homeowners Insurance Coverages  

This article will give you an overview of what is in a Homeowners policy. The Homeowners policy is divided into 2 sections.  Section 1 of the policy is the property portion of the policy.  Property coverages are divided into 4 categories with specific limits of coverage for each. Section 2 of the policy is the liability and medical section of a Homeowners policy.

Section 1

Dwelling:  This is also called your residence premises, which is the principle place you reside in. Your policy will list a specific limit of insurance, which should reflect the replacement value of your home.

Other Structures:  This is a building, which is a detached structure of your home.  The coverage amount is usually 10 percent of your dwelling coverage. If you think your other structures are worth more than 10 percent of your dwelling you should think about increasing this coverage.

Personal Property: This portion of your policy covers losses to your furniture, clothing and other personal possessions, which are in your home or elsewhere. Typically the limit of coverage for personal property it between 50-70% of what your dwelling is insured for. Certain types of personal property like jewelry and money, have specific limits of coverage.

Loss of Use: This part of your policy covers additional living above your normal living expenses after a covered loss has happened to your home. The cost of staying at a motel or in an apartment while your home is being rebuilt or repaired is an example of what’s covered under loss of use.

Section 2

Section 2 of the Homeowners policy is the liability section.

Comprehensive Personal Liability: If a claim is made or a suit is brought against someone insured under the homeowners policy for bodily injury or property damage, coverage will be provided for legal costs and judgement against the insured, up to the policy limits.


Medical Payments to Others: The policy will pay the necessary medical expenses that are incurred by someone injured on the insured premises, regard less of fault and subject to the policy limit.

Make sure your Dwelling coverage is rated on Replacement Cost, not Actual Cash Value and insured to 100% of the value.  If you have Actual Cash Value coverage, you will have big problems at time of loss.  The claim you put in may not fully cover the amount of loss.  Replacement cost will cover your claim, without deprecation.  If your home is newer you may be eligible for guarantee replacement coverage on your home.  This will guarantee the complete rebuilding cost to your dwelling if your home is insured to 100 percent. It is very important to see if you can get his coverage on your Homeowners policy.

Make sure you have replacement cost coverage on your personal property. If you do not have this coverage all your contents will be depreciated at market value.  When you have replacement cost on contents, there will be no deprecation of the contents, and you will be able to replace with present market prices up to policy limit. It is very important to see if you have this coverage on your Homeowners policy.



This is a basic overview of a Homeowners insurance policy. If you have any questions please E-mail Lester Robinson at lrobinson@thenorthwoodscorp.com . or contact you own insurance agent for any questions you may have. 

If you would like a free home inventory guide sent to you from the Northwoods Corporation, please E-mail your name, and address to lrobinson@thenorthwoodscorp.com , and you will receive one in the mail.

Please refer to your personal Homeowners policy for conditions and exclusions.


If you would like a quote on your Homeowners insurance go to

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