Limits in Standard Home Insurance Policies

17 Sep Limits in Standard Home Insurance Policies

Your home is more than just a roof over your head. It may be your most valuable asset, and one you cannot afford to replace out-of-pocket if a disaster were to occur. That is why protecting your home with quality insurance is so important. What is also essential is to understand the limits within your policy and how they impact the level of cover you receive. When disaster strikes, you want to be sure you have plenty of coverage with high limits that will help you get back on your feet.

Standard homeowners insurance policies typically include the following:

Dwelling 

Covers damage to the home and attached structures, such as the attached garage, decking, or porch. The typical limit is enough to rebuild your home, so be sure to purchase enough coverage to cover this cost. Keep in mind that a standard policy will not pay for damage caused by a flood, earthquake, routine wear and near, and neglect.

Other structures

This covers stand-alone structures on your property that are not attached to the main building. This would include a fence or detached garage. The typical amount is 10% of the dwelling coverage.

Personal property

Coverage to help pay for repairs and replace belongings that are stolen or have been damaged in a covered incident. The typical limit is 50% to 70% of dwelling coverage. The best way to determine your limits is to conduct a home inventory where you list all of your belongings and their value. Expensive items like jewelry and art are covered, but there are usually dollar limits if they are stolen. To protect their full value, you may need to take out a personal property endorsement.

Additional living expenses (ALE)

This helps to pay temporary living expenses while your home is being repaired, which is typically 20% of dwelling coverage. Keep in mind that some policies also include a time limitation. However, these limits are separate from the amount available to rebuild or repair your home. If you use up all your ALE coverage, your insurer will still pay the full cost of rebuilding your home, up to the policy limit.

Medical payments

This portion of your home insurance pays to treat someone injured on your property, regardless of who’s at fault. It also helps if you, a family member, or pet injures someone elsewhere. Coverage limits range from $1,000 to $5,000.

Liability

If you injure someone or cause property damage accidentally or through neglect, this coverage will help cover associated costs. The limits range from $100,000 to $500,000. However, it’s a good idea to discuss whether you should purchase a higher level of protection with your insurance agent. If you have s

If you own property or have investments that are worth a great deal more than the limits of your liability on your current policy, discuss umbrella coverage with your insurance agent. These days, you don’t need to be a millionaire to benefit from an extra million dollars in liability coverage. This cover is your safety net that starts paying losses once you’ve reached the limits of your basic policy.

For example, if an accident occurred on your property and you exhaust your home insurance liability coverage, you will then be held responsible for paying the remaining amount. If you have an umbrella policy, however, this coverage will kick in to take care of what is left, up to the limit in the policy.

When you’re ready to secure reliable homeowners insurance with the right limits in coverage, talk to the team at Dougherty Insurance. We can help you find the right coverage you’re looking for.