How S & S Insurance Determines Your Homeowners Insurance: Coverage A
In a standard Homeowners insurance policy, there are four types of coverages generally available:
- Coverage for your home’s structure
- Coverage for your personal belongings
- Liability protection (coverage for others who may be injured at your home)
- Living expenses in the event you are temporarily unable to live in your home because of an insured loss
“Coverage A” on a Homeowners insurance policy covers damage to your home’s structure. Your independent agent can help you determine your Coverage A, but here are some things to bear in mind when preparing for that discussion.
Coverage A must cover the cost of rebuilding your home at current construction costs. This doesn’t include the cost of the land your home sits on. Coverage A is not the market value of your home or the amount you paid for it. Here’s why: Chances are your home was built as part of a larger development. If this is the case, your builder bought materials in bulk to save money, so your purchase price is reflective of these savings. Rebuilding your home, in the current economy, using materials purchased just for your home, is the amount your Coverage A should reflect.
According to The Insurance Information Institute, you should account for these things when calculating your Coverage A or Replacement Cost:
- Local construction costs
- Your home’s square footage, including any additions you’ve added
- The type of exterior wall construction (frame, masonry or veneer)
- Home style
- Number of bedrooms, bathrooms and other rooms
- Roof material and type
- Other structures on the property including garages and sheds
- Special features such as arched trim and fireplaces
If you’re not sure where to start, consider using an online “Replacement Cost Estimator” and share your calculation with your independent agent.
Determining an accurate Coverage A can ensure you are properly protected.