Homeowners Insurance AZ protects your home and belongings from damage or theft. It also typically includes liability coverage in case a family member damages someone else’s property while on your home’s premises.
Consider bundling your homeowners and auto insurance with one company to receive a discount. Safety and security devices like fire alarms and deadbolts could also lower your premium.
Homeowners insurance pays to repair or replace your property in the event of a covered disaster. It also covers you if someone is injured on your property and sues you. But it does not protect you from earthquakes, floods or volcanic eruptions, which typically require special, separate homeowners insurance. Read your policy carefully to fully understand what it covers and does not cover.
A standard homeowners policy includes a section called dwelling and other structures coverage, which provides protection for your house and any attached structures like a porch or garage. It also covers any stand-alone structures on your property, such as fences and sheds. Generally, this coverage does not include the cost of removing or replacing trees, shrubs and other landscaping items that may be damaged by a covered peril. It may also not include the cost of repairing any damage caused by floods, hurricanes or other natural events that are considered outside your control.
Another important part of the property protection in a standard homeowners policy is the limit it sets for how much the insurer will pay to replace or repair your home. This is commonly referred to as your “dwelling” limit. It is normally based on the replacement cost of your home at the time you purchased your policy, which does not necessarily reflect current real estate market values or changes in construction costs.
Your policy also usually provides a limit for personal property, which is your belongings inside the dwelling. Normally, this is limited to 50 percent of the amount set for dwelling coverage or an established amount agreed upon by you and your insurance company. Some standard policies also provide for additional limits for certain types of valuable items.
Most standard homeowners policies also provide for liability coverage in the event you or a family member is sued because of injury to another person on your property. This is typically covered under the property section of your policy under coverage called “Coverage E.” Generally, this will pay for your legal fees or any damages awarded to an injured person.
Additional Living Expenses
Many homeowners insurance policies include additional living expenses coverage, which helps cover hotel costs and other unforeseen expenses while your home is being repaired after a disaster. This coverage is sometimes referred to as “loss of use” or “homeowners rental insurance.” Depending on your policy, this may help you keep up with your normal expenses while your home is under repair and avoid financial hardship.
ALE is included in most homeowners, condo, and renters insurance policies, typically as a standard part of your dwelling coverage limit. It will help pay for hotel stays and other incurred expenses such as meals at restaurants, moving fees, and even pet care costs while your house is uninhabitable. It will not cover the cost of your mortgage payment or any other debt you have related to your home. In order to qualify for ALE, you must file a claim with your insurance company after experiencing a loss and they must determine that the situation meets policy requirements.
While many people are familiar with ALE, not everyone is clear on what it actually covers. It only applies when a covered disaster makes your home uninhabitable, not simply inconvenient. For example, let’s say your neighborhood is threatened by a wildfire and local authorities require evacuation. In this case, your ALE would kick in because you were forced to evacuate your home.
When claiming on your ALE coverage, it is important to keep track of all your expenses and receipts in order to be reimbursed. A typical claims representative will ask you to submit a list of your normal expenses and then subtract these from the total amount of your added living costs to determine how much your insurance company will reimburse you.
Keep in mind that if your loss is severe enough, you may be eligible for fair rental value coverage instead of ALE. While these are similar in some ways, they are not identical, and it is best to discuss your options with your insurance agent before a disaster occurs.
Other Structures Coverage
Other structures coverage, also known as Coverage B in homeowners insurance, protects your physical property that isn’t attached to or connected to your home. If this property is damaged or destroyed by a covered peril, your policy’s Coverage B may help pay for repairs or replacement. This typically includes things like fences, detached garages and sheds, swimming pools, and other structures on your property. However, certain fixtures like decks and solar panels are generally covered by your dwelling coverage rather than other structures coverage.
Your other structures coverage is typically set at 10% of your home’s dwelling coverage amount, though this number can vary from insurer to insurer. This means that if your dwelling coverage is $300,000, then your other structures coverage would be $30,000.
If you have high-valued structures on your property (like a pool, gazebo or guest house), this percentage might not be sufficient to protect them. For this reason, you can usually increase your other structures coverage limit by adding to or modifying your policy, though doing so could also change your premiums.
Other Structures coverage is typically written on an open perils basis, meaning that it will typically include damage from a wide range of perils. However, it excludes certain perils such as floods and earthquakes. If you have a structure on your property that is used for business purposes, then it might need its own separate policy or rider as most policies only cover damage to structures that are used solely for personal purposes.
Most homeowners policies also exclude things like wear and tear, and damage from excluded perils such as rodents, pests and insects. This means that if you have an old and rotting fence, your other structures coverage won’t likely pay for its repair or replacement. Additionally, your other structures coverage doesn’t typically pay for the contents of your other structures, like gardening equipment in a greenhouse or a riding lawnmower in a shed.
If you want to ensure that your other structures are protected, then you should consider obtaining their own policy or riders. This will likely cost more than simply adding them to your existing policy, but it can be an inexpensive way to ensure that your high-valued structures are insured.
Liability Coverage
Homeowners insurance provides a level of protection for property owners. It is typically a requirement when purchasing a mortgage and covers the cost of repair or replacement for a wide range of natural and man-made disasters. It also covers the personal belongings of the policyholder and family members, even when they are away from the house or living in another home temporarily. It does not typically cover earthquakes or floods, however, additional coverage can be obtained by obtaining a separate policy or by adding on riders for these risks.
The basic form of homeowners insurance (HO-2) generally insures your dwelling and certain other structures on the property for their actual cash value, less depreciation. It also protects you from liability for damage done by your pets. In addition, a personal property endorsement is included in the policy that insures your belongings for up to 50% of the dwelling coverage limit.
Most insurers also provide additional optional coverages that you can add to your homeowners policy. Medical payments coverage is an important addition that pays for reasonable medical expenses for persons who are accidentally injured on your property. Homeowners insurance also normally covers up to a specific limit the costs associated with having to replace your possessions. This may include furniture, clothing and appliances. In some cases, it may also cover credit card debt incurred if your belongings are stolen.
In addition, most policies cover the expense of additional living expense that is incurred if your home becomes uninhabitable due to a covered loss. It may also include coverage for landscaping, lawn maintenance and snow removal. There are other limits and restrictions that are specified in your policy, and special coverages may be required for jewelry, guns, furs or money.
Liability coverage is included in most policies and insures you against the cost of lawsuits arising out of bodily injury or property damage that you or family members cause to others, including pets. A standard policy offers up to $100,000 in liability protection, although higher limits can be obtained by purchasing an umbrella or excess liability policy.