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Insurance Tidbits: How Would Your Homeowners Policy Respond to a Claim?

Coverage: Dwelling

Coverage: Dwelling

-Contributed to the August edition of Camelot’s House and Home News, by Jon Gardner, CPCU, an Insurance and Financial Services Agent with Farmers Insurance

A common question we are often asked is “what does my homeowners policy cover?” The following outlines some major coverages and endorsements your policy should have.

Dwelling: This covers losses to the main structure of your home. The limit on your policy should be sufficient to rebuild your home if it were completely destroyed. Based on the characteristics of your home, your agent will use a cost estimator to determine the proper replacement cost. If your agent has never inquired about these characteristics, the replacement cost may not be correct.

Personal Property: This covers losses to your personal belongings.

Personal property

Personal property

You should take the time to complete an inventory of your belongings. Be sure to include everyday items like clothes, shoes, and CDs. Having an inventory will not only help you determine if you have sufficient coverage but it will also help during the claim process.

Loss of Use: This covers additional expenses you may incur as a result of a covered loss. For example, the additional cost to rent an apartment while your home is being rebuilt would be covered under this portion of your policy.

Liability: This covers for bodily injuries to other people or damage to their property if you are found liable.

In addition to the coverages described above, you should also review your policy for Extended Replacement Cost and Contents Replacement Cost. Extended Replacement Cost provides additional dwelling coverage over and above the limit on the policy. This can be valuable after catastrophes, when costs for materials and labor rise suddenly due to high demand.

Contents Replacement Cost provides the opportunity to replace old items with new items. For example, if you had a 10-year-old sofa that burned in a fire, the value of the sofa might be only $200. However, it would cost $750 to replace it with a new couch. Without Contents Replacement Cost, you would be entitled to only $200. With Contents Replacement Cost, you would be entitled to $750 if you bought the new sofa.

There are other coverages provided under most policies.

Review your coverage on an annual basis - before a claim

Review your coverage on an annual basis - before a claim

You should ask your agent/broker to review your coverage with you on an annual basis. Reviewing and understanding your policy prior to a claim may help prevent a disaster from becoming worse.

Jon Gardner, CPCU, is an Insurance and Financial Services Agent with Farmers Insurance who offers complimentary insurance evaluations. His office is located at 27413 Tourney Road, #160, in Valencia. He can be reached at (661) 775-9244 or at

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