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Home Insurance Policy Basics in California

The California Homeowners Insurance policy coverage contains two sections.

Section I

Provides Property Insurance Coverage’s (A, B, C, D)

Coverage A

Dwelling: Coverage A provides major property coverage that protects your house and attached structures if it is damaged by a covered peril.

Coverage B
Other Structures: This coverage provides protections to other structures on the residence premises that are not attached to the dwelling. Items covered include detached garages, tool sheds, etc. Coverage B is normally limited to 10% of the coverage A limit. However, you may purchase more coverage for an additional premium.

Coverage C
Personal Property: This coverage provides protection for the contents of your home and other personal belongings owned by you and other family members who live with you. Coverage C is normally 50% of coverage A or is subject to an established amount agreed upon by you and the insurance company.Coverage is limited on certain types of property that are especially susceptible to loss, such as: Jewelry, Furs, Fine Arts, Silverware, Antiques, Collectibles, Firearms, Money. Additional amounts of insurance may be purchased. You may want to consider scheduling these items separately.

Coverage D
Loss of Use: This coverage will help with additional living expenses if your home is damaged by a peril insured against to the extent that you cannot live in your home. These expenses include, but are not limited to, housing, meals and warehouse storage. Coverage D is normally limited to 20 percent of Coverage A.

Section II

Provides Liability Insurance Coverage’s (E , F).

Coverage E
Personal Liability: This section of the homeowners policy will provide coverage in the event you or a resident of your household are legally responsible for injury to others. Coverage E normally provides a defense and will pay damages, as the insurance company deems appropriate. There are some exceptions. The liability coverage will not protect you in all situations, such as an intentional act. All of the exclusions and specific language can be found in your policy.

Coverage F
Medical Payments to Others: This coverage pays for reasonable medical expenses for persons accidentally injured on your property. For example, if a neighbor’s child is injured while playing in your home, the medical payments portion of your homeowner’s policy may pay for necessary medical expenses. medical payments coverage does not apply to your injuries or injuries of those who reside in your household. It is not a substitute for health insurance. Business activities are also excluded. All of the exclusions and specific language can be found in your policy.

Perils Generally Covered by a Homeowners Policy if Damage is caused by:

  • Fire or lighting, Windstorm or hail, Explosion, Riot or civil commotion, Aircraft, Vehicles, Smoke,
  • Vandalism & malicious mischief, Theft, Volcanic eruption, Falling objects, Weight of ice, snow, sleet
  • Sudden & accidental water damage, Breakage of glass

Perils Generally not covered by a Homeowners Insurance Policy if Damage is caused by:

  • Flood, Earthquake, Earth movement, Termites, Insects, rats, mice, etc, Water damage cause by seepage or leaks.
  • Mold, Wear and tear or maintenance, War, Insurrection, Tidal wave, Neglect, Nuclear hazard.
  • Losses to house vacant for 60 days or more.

Additional Coverage Options:

Need more protection than the basic homeowners insurance policy provides? You can add additional riders for

High Value Item Coverage: a good idea if you own jewelry, artwork, antiques, collectibles or firearms with a total value that exceeds your policy’s maximum pay out for such items.
Earthquake or Flood Coverage: a must-have if you live in an area prone to such conditions. A standard renter’s insurance policy does not include coverage for a flood or earthquake.
Sewer and Drain Back Up Coverage: back-ups happen more often than you would think, and they cause a lot of damage when they do.
Replacement Value Coverage: If you make a claim, you’ll be reimbursed for the full replacement cost of your items – rather than the depreciated cash value of your items.
Home Business Coverage: Most insurance policies offer very little coverage for business equipment. If you work from home, consider adding a home business rider to boost your equipment and liability coverage.
Business Merchandise Coverage: If you store your business’ inventory at home, an additional rider will be needed to insure it properly.