Home Owner Insurance Terms

Replacement Cost Coverage
Replacement cost coverage can be on the dwelling and/or your contents coverage.  If the policy has replacement cost coverage, there is no deduction for depreciation in the event of a loss.  Some replacement policies will limit the maximum amount payable to a percentage of the actual cash value.  If the policy has replacement cost coverage, there still could be certain items that are not settled on replacement cost basis.  

Actual Cash Value
The value of an item after depreciation is called actual cash value.

Additional Living Expense
If the home you live in is damaged or destroyed by a named peril, your policy may include Additional Living Expense.  This is additional coverage pays for the reasonable increase in living expenses that may be required in order to maintain your normal standard of living while your home is being repaired.  The maximum amount of coverage may be limited to a specific amount, or there may be a maximum amount of time.

Family Liability
You and your family members are protected against liability claims brought by others for accidental bodily injury or damage to their property.  This protection does  not cover auto liability claims.

Family Liability can pay damages, which an insured person is legally obligated to pay, due to bodily injury incurred at the insured premises.  The coverage is not applicable to a resident of the household.  This coverage can also pay for damages to property of others by minor children, such as a window accidentally broken by a rock or BB gun.  Intentional acts are not covered.

Coverage can also apply off premises for damages that are not business related.  An example of this would be if a person was fishing and happened to snag a someone with a fish hook and a trip to the emergency room was required.  

Guest Medical
Your guests who are accidentally injured on your property will be paid for the medical expenses regardless of who was at fault.  The injury must have arisen as a result of a covered loss.


Deductible
The deductible that you choose is the amount that you pay in the event of a claim.  The higher the deductible, the less expensive the policy as you are self insuring for a larger amount.  Common deductibles are $250, $500, and $1,000.  Basically, this is the amount that you are self insuring for.  Your loss has to exceed your deductible before the insurance company will make a payment.  The deductible applies when the insurance company makes a payment for your loss.  If there is a Liability or Guest Medical claim, the deductible usually does not apply.

Scheduled Personal Property / Jewelry Rider
Most homeowner policies will have a standard amount of coverage available for the theft of watches, jewelry and furs.  The limit can be as low as $250 per item and may be as high as $1,000 per item with a maximum coverage available per loss of $1,000 to $2,500 for all watches, jewelry and furs.  In order to be properly insured, you can schedule these items and pay additional premiums based on the total amount of coverage.  In order to schedule an item, you usually will need a Bill of Sale or an Appraisal less than one year old for each item.  Other coverages may be available.  If you have a concern in this area, you should let your agent know.