Thursday, August 14, 2014

Homeowners Declaration: Decoded

The Declarations Page is the summary of your policy, and also serves as proof of insurance.  Understanding your Dec Page will help you determine if you are properly covered, and what you can expect your out-of-pocket expenses to be in case of a loss.  Every company’s Dec Pages look slightly different, but should contain the following components:
Policy Identifiers and Rating Factors:
  • Insurance Company Name and Address
  • Insurance Agent Name and Address
  • Policy Number
  • Policy Term (Policy Period): The effective and expiration dates of the policy
  • Your name: Should match the property deed
  • Property Address (Insured Location)
  • Mailing Address: Might be the same as the property address; may also be a different address or PO Box
  • Policy Form: The type of policy.  Owner-occupied residences are usually insured on the HO3 form.
  • Protection Class: A rating factor based on the proximity to fire hydrants and fire stations
  • BCEG (Building Code Effectiveness Grading): A rating factor based on the codes in effect when your home was built
  • Construction Type: Most commonly either masonry or frame
  • Territory / Terrain: Rating factors based on your home’s exact location and distance to water
  • Year Built
  • Occupancy: Either Owner- or Tenant-Occupied.  Mixed occupancies are considered Tenant-Occupied.
  • Usage: Identifies to what extent the home is occupied.  Primary, Secondary or Seasonal
Property Coverages, Forms and Endorsements:
  • Dwelling (Coverage A): The amount your insurance company will pay for damages to the home.  Based on your home’s replacement value.
  • Other Structures (Coverage B): For detached structures (fences, detached garages, sheds, docks, etc).  Usually 2%-10% of the Dwelling limit. 
  • Personal Property (Coverage C): For the contents of your home.  Usually 50% of the Dwelling limit.
  • Loss of Use (Coverage D): For additional living expenses incurred due to a loss.  Usually 10%-20% of the Dwelling limit.
  • Personal Liability (Coverage E): For injuries and damages for which you are legally liable.  Usually $100,000 or $300,000.
  • Medical Payments to Others (Coverage F): For injuries, regardless of fault, for uninsured guests.  Usually $1000 – $5000.
  • Deductibles: Hurricane Deductible (usually 2%) and AOP (All Other Peril) deductible: usually $1000 or $2500.
  • Personal Property Replacement Cost: Requires the policy to replace your belongings, instead of paying you a depreciated value.
  • Screen Enclosure Coverage: Provides hurricane coverage for attached structures with a different roof (pool cages, carports, etc)
  • Many other optional coverages
Policy Credits, Surcharges and Premium
  • Wind Mitigation discounts
  • Senior / retiree discounts
  • Alarm, gated community, ceiling sprinkler discounts
  • State surcharges and fees
  • Total annual premium
 Additional Interests
  • Any party with an insurable interest in your home.  Your mortgage company or private mortgage holder will be listed here.
 We hope that this information has been helpful.  Thank you very much and please let us know if you have any questions!

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