Homeowners Insurance – Detailed Information

Homeowners Insurance Policy Types:

Homeowner’s insurance policies provide coverage for losses to your home, your personal belongings, and also for detached structures on your property. It also provides protection in the event of an injury to people on your property, as well as liability for injuries and damage you cause to other people. It provides for loss of use of your home if you are unable to continue to live there because of an insured loss.

As a homeowner, there are generally three types of home insurance policies you could purchase; Comprehensive, Broad and Named Perils Coverage. In special circumstances, a Basic or Fire & Extended Coverage policy may be purchases \ required.

Not all policy types cover the same things and therefore this is why we take the time to get to know our clients, to understand their needs and are thus able to craft an appropriate package for them.

Comprehensive Coverage:

This is the most inclusive home insurance coverage available, and is sometimes referred to an “All Risk Policy”. It covers the building (dwelling), and its contents for all risks except those that have been specifically excluded in the policy documents. An example of such exclusion would be a sewer backup – which is naturally excluded by the policy, but that an individual can purchase additional coverage for to ensure that exclusion has been removed, and coverage will be provided for this type of loss. This is typically the more expensive of the policies.

Broad Coverage:

If the comprehensive policy costs more than you want to pay, then this is the next option. This policy provides comprehensive coverage on the building and named perils coverage on contents. Thus, you would have “All Risks” coverage except for the named exclusions on the dwelling, and only coverage for spelled out perils on the contents. The named perils are generally:

  • Air and vehicle impact
  • Electrical current
  • Escape of fuel oil
  • Explosion
  • Falling object
  • Fire
  • Lightning
  • Riot or civil disturbance
  • Smoke
  • Theft
  • Transportation
  • Vandalism
  • Water Damage (with limitations)
  • Wind and Hail

*this may vary from policy to policy

Remember, not all companies have the same home insurance options. And many use brand names with variations of coverage. So check your policy carefully.

Named Perils Coverage:

If you are looking to save money by carrying the financial risk of some losses yourself, you may wish to consider a named perils policy that covers only those perils that are specifically stated in the policy. This coverage is only on perils named in the policy such as those listed below. This makes the policy more affordable but puts more risk on the homeowner. Limits for contents are usually lower with this type of policy.

  • Air and vehicle impact
  • Electrical current
  • Escape of fuel oil
  • Explosion
  • Falling object
  • Fire
  • Lightning
  • Riot or civil disturbance
  • Smoke
  • Theft
  • Transportation
  • Vandalism
  • Water Damage (with limitations)
  • Wind and Hail

*this may vary from policy to policy

Remember, not all companies have the same home insurance options. And many use brand names with variations of coverage. So check your policy carefully.

Basic Coverage / Fire and Extended Coverage:

Some insurers offer a very basic coverage which is very limited in what they will be willing to cover. They may only be offered if the dwelling to be insured does not meet the minimum standards of the insurer, or if there has been multiple claims. Often times there are problems that need to be addressed as it increases the risk of having a claim. The premium can vary greatly depending on the situation and company offering the coverage.

Perils usually covered:

  • Fire or lightning
  • Windstorm or hail
  • Explosion
  • Riot or civil commotion
  • Aircraft
  • Vehicles
  • Falling objects
  • Smoke

*this may vary from policy to policy

Remember, not all companies have the same insurance options. And many use brand names with variations of coverage. So check your policy carefully.