Residential Coverage consists of 2 Basic types:

1. Replacement Policy – This is the best coverage for your home because it thoroughly covers all that can go wrong with the house. It gives you content, Liability, and replacement value for your home, among other things. Most carriers have their own calculations to come up with a replacement cost for your home.
2. Actual Cash Value – This type of coverage is a pretty basic way to insure your home. This doesn’t cover land and many other things that come with the house. ACV means the carrier will give you the actual cash value of the house at the time of the incident.

Dwelling

provides protection against damage as well as possible loss in regard to your home in case of a covered claim like hurricane, lightening, fire etc. (Separate policies are required for flood or earthquake insurance.)

Other Structures

which are protected by a home insurance policy include detached garages as well as other detached constructions on your property. Typical coverage on other structures is 1/10th of the dwelling coverage, though higher amounts might be bought if needed.

Personal Property

is incorporated in a home insurance policy and provides protection to your personal items as well as household contents if they get stolen or damaged by fire, hurricane or any other peril, which is covered by your policy. Such items might include, but are not restricted to, furniture, clothing, sports equipment, etc.

Loss of Use

provides for coverage for your living expenses in case you cannot reside in your home because of a covered claim. Such type of coverage usually covers hotel, restaurant bills, as well as other living expenses that you may incur when your house is under repairs.

Personal Liability Protection

provides coverage in case a lawsuit is filed against you or the covered family members in regard to property damage or bodily injury. Your pets can also be included in this segment of your policy protecting you against property damage or bodily harm that they might cause to others.

Medical Payments

coverage helps in covering medical expenses which you may be held responsible for because of an injury occurring on your premises in case there is no lawsuit.

Know the difference between replacement cost and market value

“Replacement cost” refers to the amount required to reconstruct the home to its original condition. It is not the purchase price, market value of the home, or the outstanding amount of a mortgage loan and doesn’t incorporate the worth of the land. “Market value” refers to the amount that a buyer would pay for a home, which includes the land, irrespective of the cost incurred while rebuilding the home.