policy you receive from your insurance company will typically have four
- The declaration/information page
identifies the policy number, the effective dates, the address of the
insured property, the mortgage holder, the coverages, coverage limits,
the premium and any discounts.
- The insuring agreement
summarizes the policy coverages. This form is typically a general
listing and can be modified by endorsements later in the policy, which
should be listed on the declaration page. The insuring agreement will
also explain the types of perils—or losses covered. The policy
will be either a named-perils policy,
which will list the types of losses covered, or an all-risk policy,
which lists the types of coverages excluded by the policy.
- The exclusions section
outlines specific coverages or perils not covered by your policy. This
section can modify coverages in the insuring agreement. Typically flood
and earthquake are excluded from homeowners and renter's policies.
Personal property, like automobiles and animals, are also typically
- The general conditions section
explains what you are expected to do in case of a loss. This section
also contains definitions for the terms used on the declarations page
and in the insuring agreement.
Look for on a Declarations or Information Page
are used to determine your homeowners or renter's insurance premium. To
ensure your company has used accurate information and is providing
the coverage you want, check the following on your policy
Property Location – Confirm that the address and names listed on
the policy are correct. In most cases, the names of all parties
involved in the mortgage should be named as insureds. Also, check the
address of the insured property; any errors in this address could cause
problems if you need to file a claim.
Dates/Policy Period – These are the dates the policy is in force.
Your lienholder or mortgage company will be checking to make sure the
policy continues without interruption. If there is a break in the
coverage, your mortgage holder can force you to pay for insurance they
purchase on the property.
Coverages – The property section will include the amount of
coverage you have on the dwelling (attached structures, plumbing,
heating, and electrical); other structures (detached garages, sheds,
fences); personal property (contents of the home, other personal items)
and loss of use (living expenses if you cannot live in the home). Note:
The manner in which the property will be replaced should also be
described here. Check to see if claims will be paid with replacement
cost (the amount it would take to replace or rebuild your home or
repair damages with materials of similar kind and quality, without
deducting for depreciation) or Actual Cash Value (often written as ACV,
meaning you will be reimbursed the amount it would take to repair or
replace damage after depreciation). These amounts should be reviewed
annually and adjustments made as new purchases are added to the house.
Coverages – The liability section includes the amount of
coverage you have for personal liability (protection for the named
insured against liability for accidents that cause injury to
other people or damage to their property) and medical payments (pays
medical expenses when people are injured on the insured’s
property). Liability insurance covers the named insured, so make sure
these limits are in line with the amount of protection you may need.
For extra coverage, you may consider a personal umbrella policy, which
provides additional liability coverage on top of the
– If you have increased coverage or added coverage outside the
basic policy, you will find those additions in this section.
– Declarations pages vary from company to company, but all
declarations pages specify the amount you are responsible to pay when
you have a loss. In some cases this will be a dollar amount, in others
it will be a percentage. If you have questions about how the deductible
is applied to the different types of coverages, talk with your agent or
– Check the list of discounts to see what was included in your
overall premium. If you think you are eligible for a discount you are
not receiving, call your agent or insurance company.
– This is the cost for the term of the policy, generally after
the discounts have been applied.
Information – The address of the lienholder listed on your policy
is where the proof of coverage will be mailed. Make sure this matches
the information provided by your mortgage company.
Company Contact – This should be either the name and contact
information for the agent from whom you purchased your policy or the
company that wrote the policy.
Renters Need to Know About Their Policy
insurance varies slightly from homeowners insurance because it only
covers the insured contents of a home and the insured's personal
liability. As a renter, you do not insure the structure.
for the contents and liability coverage the same considerations apply
as for homeowners. Make sure the limits of personal property coverage
are enough for all the belongings in the house. If you own antiques,
art, jewelry or electronics, check the limits of the basic renter's
policy; it may be necessary to purchase additional coverage if your
belongings exceed the limits of the policy. As with a homeowners
policy, the liability coverage in the policy protects the named insured
from legal recourse as a result of an injury on the property. If the
basic limit of liability will not protect you sufficiently, then an
umbrella policy is an option for additional coverage.
Things to Know About Your Homeowners/Renter's Insurance
Items – Backyard items, such as a trampoline or pool, may require
you to increase your liability coverage with an umbrella policy. In
some cases, these items may even lead a company to cancel your policy.
Talk with your agent before you purchase recreational items to find out
what coverage your company offers.
– As you acquire more valuables – jewelry, family
heirlooms, antiques, art – additional coverage can be purchased
to cover these special items. Typical homeowners or renter's policies
have limits on these types of belongings.
history – When you apply for a policy or when a current policy is
renewed, it is normal for an insurance company to check the insured's
claims history. For new customers, companies often run a Comprehensive
Loss Underwriting Exchange (C.L.U.E.), Colossus, or similar report.
This information is used to help determine the cost of insuring your
home. Ask your agent or insurance company how long previous claims will
adversely affect your premium.
history – In some states, a credit-based insurance score can be
used as a factor to determine your premium. It is a good idea to check
your credit report annually to ensure the information is correct. If
you find errors, check with the credit reporting company about how to
make necessary amendments and then ask for a review of your premium.
You can find more information about credit based insurance scores here.
inventory will help you figure out how much personal property insurance
your policy should include. It will also help you file a claim in the
event of a loss. An inventory should include all of the vital
information about your belongings (brand name, price, date of purchase,
model, serial number and receipts) and should be accompanied by photos
of the items. The NAIC has a free smartphone app that can walk you
through creating a home inventory. The iPhone® version is available
the Android version here.
A simple-to-use home
inventory checklist is also available on the Insure U website.
have made your inventory or taken photographs of your home, e-mail the
information to family or friends, or to your insurance agent.
your options will help you make smart insurance choices to protect you
and your family. For more information about homeowners or renter's
insurance, go to InsureUonline.org
and chose the life situation that best fits you.