Home Insurance 101

There are many coverage parts included with your Minnesota Home Insurance policy. To make it as simple as possible, I will use 3 of the primary coverage types on your Homeowners Policy.

Home Replacement Coverage

The first coverage limit that everyone hears about for their home policy is the Dwelling Coverage, also known as Coverage “A”. This is the replacement coverage for the structure of your home. The home replacement coverage is the dollar amount the insurance company believes it will cost to replace or rebuild your home using todays materials and labor costs. This is the primary function of your homeowners insurance policy. If your home is damaged beyond repair, how much will it cost to replace it? Many of the other coverage limits on your policy will stem from this Replacement Limit. The Best Insurance Companies will use an endorsement to further protect your home called Guaranteed Replacement Cost. This is an endorsement that guarantees your home will be built as long it is insured properly.

Personal Property Coverage

Personal Property coverage covers all of your personal belongings. If you tip your house upside down, everything that falls out is your personal property. All your clothes, furniture, electronics, appliances, etc, these are all your personal property. As mentioned above, this limit is determined by the Coverage A amount. You will typically have about 50% to 70% of your Coverage “A” limit. Meaning, if your home Coverage “A” limit is $100,000, you will have $50,000 to 70,000 coverage for your personal property. You can add to this coverage, but typically this limit provides enough coverage for the amount of personal property that you have. Again the Best Insurance Companies will make sure you have what is known as Replacement Cost Coverage on your personal property, which means if you have loss, you will be able to replace your property with brand new property.

Home Liability

Liability is the coverage that you have if someone decides that they want to sue you. If someone is injured on your property or you or someone in your family injures some one or damages someone else’s property, than you have this liability limit to defend you against the lawsuit. This will cover the cost to defend the lawsuit even if you are not found negligent. The most common home liability claim is a slip and fall on your sidewalk or driveway. The next most common is an injury from a party that you hosted. Friends and family can turn on you quick when medical costs are involved, so I recommend carrying as much liability insurance as you can on your Home Insurance Policy.

What Does Home Insurance Cover?

Home insurance covers damage to your home from Fire, Wind, Hail, Tree falling, broken water pipes, vandalism and many, many more odd occurrences that damage your home or property. The key components of coverage is that the loss must be “sudden and accidental”. This means that it will not cover general maintenance issues. It will not cover damages that occur over a period of time. Home Insurance does not cover flood. Flood Insurance must be written on a separate policy. Home insurance does not cover your vehicle, even if it is parked in your garage.

If you have questions about your Minnesota Home Insurance Policy, please reach out to our office at any time. Home Insurance is our specialty, so we would love to review and offer you a quote on your homeowners insurance at any time.

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