The homeowners insurance policy is a package policy that combines more than one type of insurance coverage in a single policy. The cost of the package policy is usually cheaper than if all of the coverages were bought separately. There are four types of coverages that are contained in the homeowners policy:
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Many years ago, most people bought insurance that would protect them only if their home was damaged by fire. Over the years, insurance companies began to offer protection for damage or loss from other causes such as windstorm, hail, vandalism, and theft. This type of homeowners insurance policy is referred to as a “named peril” policy. It covers damage to your home only if the loss is caused by something specifically listed in the policy. There is a second type of homeowners insurance policy that covers damage or loss from all causes except causes that are specifically excluded. This comprehensive policy is referred to as an “open perils” policy. Today, most insurance companies in Virginia sell both “named peril” homeowners insurance policies and “open perils” homeowners insurance policies. It is important to realize that even an “open perils” policy does not cover every possible cause of loss. No homeowners insurance policy available in Virginia today covers property damage losses due to all causes. For example, no homeowners policy pays for damages caused by nuclear accidents or war, and generally, homeowners policies do not cover damages caused by a flood.
Under the liability section of your homeowner's policy, your insurance company will pay if another person is injured or if another person’s belongings are damaged due to your fault. Liability coverage in a homeowners policy is not limited to accidents that occur at your home. It provides protection to you and your family wherever an accident may occur. For example, your insurance will protect you if: • Your child injures a playmate at school. • You hit a golf ball through a window. • The letter carrier slips and falls on your front steps. • Your friend slips and falls down the stairs in your home. • You accidentally break a window at a restaurant. • Your dog bites a neighbor; however, your insurance company may exclude coverage if you have a dangerous or vicious dog that has previously bitten or attacked. When you or a member of your family are legally responsible for injury to others, the liability coverage under your homeowners policy will usually cover the damage and pay for a lawyer to defend you. There are some exceptions. The liability coverage will not protect you if you are sued as a result of something you did in your job or for something you did intentionally to harm someone else. In addition, it will not pay for liability arising out of the use of an auto, most motorized land vehicles including mopeds while in use away from the insured property, or aircraft. The basic limit for liability coverage is usually $100,000 for each occurrence. You can request higher limits which are available for an additional cost.
Medical payments coverage is usually contained in the liability section of your homeowners policy. Unlike liability coverage which provides protection only if you are at fault, medical payments coverage pays if someone is injured in your home regardless of fault. As a minimum, this part of your policy will pay for reasonable medical expenses incurred within one year from the date of loss for a person who is injured in an accident in your home. The coverage does not apply to you and members of your household. For example, if a neighbor’s child chips a tooth while playing in your home, the medical payments portion of your homeowners policy will pay for necessary dental work. The medical payments portion of your homeowners policy will also pay if you are involved in the injury of another person away from your home in some limited circumstances. Medical payments coverage limits are generally $1,000 for each person. You may request higher limits.
If it is necessary for you to move into a motel or apartment temporarily because of damage caused by a peril covered by your policy, your insurance company will pay reasonable and necessary additional living expenses. It is important to note that your company will not pay for all the living expenses that you have. It will only pay those additional expenses above and beyond the normal and customary expenses. The typical policy will pay an amount up to 20% of the policy limit on your dwelling for these expenses. You should also note that if you move in temporarily with a friend or relative and do not have any extra expenses, you will not be paid any additional living expenses by your insurance company.