What are the Different Types of Homeowners Policies?
If you are a Glen Ellyn, IL resident searching for homeowners insurance, you may be confused about the different types of homeowners’ policies available. As your Glen Ellyn, IL homeowner insurance agent will tell you, one size does not fit all when it comes to homeowners insurance. There are generally three types of homeowners’ policies that you can purchase. They all provide varying degrees of coverage. Your insurance agent can help you decide which policy is right for you. Here are some of the basics about the three types of homeowners’ policies available; basic form, broad form, and special form.
The basic form homeowners’ policy offers coverage for your dwelling, other structures, personal property, loss of use, personal liability, and medical payments to others. Your coverage for other structures, personal property, and loss of use are based upon a percentage of your dwelling coverage. Other structures coverage is 10 percent of your dwelling coverage. For example, if your home or dwelling was insured for $100,000, your coverage for other structures such as unattached garages or sheds would be $10,000. In the basic form homeowners’ policy, personal property is covered for 50 percent of your dwelling coverage. The loss of use would be 30 percent of the amount of insurance you have on your home structure. However, there are maximum limits on certain types of personal property. So, if you have a lot of expensive items in your home, the basic form policy may not be right for you. Your Glen Ellyn, IL homeowners insurance agent can explain more to your about the limits of coverage on personal property under the basic form homeowners policy.
The broad form homeowners’ policy offers a little more coverage than the basic form homeowners’ policy. One important thing to remember about both the basic and broad form homeowners insurance policy is that they are “named peril policies.” What this means is that your property is only insured against perils that are specifically named in the policy. Fire is a peril that is covered under all homeowners’ insurance policies. So, how can you tell what your homeowners’ policy specifically covers? For this information, you will need to read the “perils insured against” section as well as any exclusions to these covered perils.
The special form homeowners’ policy offers the most comprehensive coverage available from a homeowner’s policy. This is because it is considered an “all risk” policy. This means that your property is covered from any form of loss unless it is specifically excluded from the policy. While the special form type of policy may be more expensive, it covers more types of losses than the basic or broad form homeowner’s insurance policy.
If all of this sounds confusing, that is because it is! That is why insurance agents have to pass courses and become licensed to sell insurance. There is much more to homeowners insurance than meets the eye. If you need help understanding more about the different types of homeowners policies available, contact your Glen Ellyn, IL homeowners insurance agent who will be more than happy to sit down with you and go offer your homeowners policy.