Homeowner insurance provides you financial protection in the event that your home
is destroyed or damaged due to an unforeseen or catastrophic event. In addition to
your home, homeowners insurance also covers your belongings (or personal
property) and can reimburse you for medical expenses and liability claims resulting
from property damage and personal injury to other people caused by you or
members of your family.
There are two basic types of homeowners coverage:
ALL RISK POLICY - offers broad protection and covers all perils unless they are specifically
excluded by the policy.
NAMED PERILS POLICY - offers narrower protection than an all risk policy and covers only those
perils specifically named under the policy. A named perils policy will also contain exclusions to perils
named under the policy.
Policies also offer different methods of repairing or replacing your property:
REPLACEMENT COST - pays for all necessary expenses associated with rebuilding or repairing
damaged property, up to the policy limits, less any applicable deductible amount.
ACTUAL CASH VALUE - factors in depreciation costs to your claim and pays you the costs to
replace or repair the damaged property, less depreciation and less any applicable deductible amount.