If you have ever looked at a homeowner’s insurance policy, you have no doubt noticed that it has a long list of numbers. You might wonder if you actually need all of those things, or conversely, if the limits listed are high enough. This is an explanation of what those coverages are and should help you choose the best limits for your home insurance in Austin, TX.
The first thing usually listed is the Dwelling limit. This number is the maximum amount the insurance company will pay if your home is completely destroyed due to a covered loss. If your policy is based on replacement cost, they calculate this number based on the cost to rebuild the house exactly the way it is, exactly where it is.
Next is “Other Structures” which will cover any detached garages, sheds or other buildings on your property. It is defaulted to 10 percent of the dwelling limit, however if you have large sheds you can increase. If you have no “other structures” though, most policies will not let you drop the coverage to save money. It is just automatically included.
Third is “Personal Property” which covers all of your belongings. There are certain limitations for jewelry, guns and collectibles that you should review with your agent. The limit for this is usually 50 -; 70% of your Dwelling Limit, but most companies will let you change it.
You then have a limit for “Additional Living Expenses”. If your house is no longer able to lived in due to a covered loss, then this will pay for you to secure lodgings elsewhere. Most companies providing Home Insurance in Austin, TX list this as 10% of the Dwelling Limit.
Section II of the policy covers third party claims. The “Liability” limit usually starts at $100,000 but can be increased. This coverage not only pays out if you are found liable for covered claims; it also places the “duty to defend” you on the insurance company which means if you are sued, they may have to provide you with a lawyer.
“Guest Medical” is also covered in this section. It pays out if someone is on your property and gets hurt, but unlike “Liability” this one requires no proof that it was your fault to pay. The limits range from $1,000 – $5,000.
This is just a brief summary, for more information contact an agent, such as Patrick Court.
