Arizona Homeowners Insurance compensates for damage to your house or personal belongings caused by fire, storms, lightning, and other disasters. It also pays for living expenses when moving out of your home.
Typically, a homeowners policy covers dwelling coverage limits that reflect current labor and material costs. There are a variety of standard homeowner policies, including the HO-3, which is generally the most cost-effective for most clients.
Homeowners insurance provides protection against several perils, including fire and theft. It also pays for reasonable medical expenses for people accidentally injured on your property. Homeowners insurance isn’t required by law, but it’s often recommended by mortgage lenders and may be a requirement if you lease your house.
The most important element of a homeowners policy is the dwelling coverage, which is typically identified as Coverage A in your policy. This is the main structure on your premises that you live in, along with any attached structures like decks and garages. Structures that aren’t attached to the dwelling, like a detached garage or pool, are covered under other parts of your policy.
Most homeowners policies provide protection for the dwelling and attached structures on a replacement cost basis, which means that they will pay to replace or rebuild your home and attached structures without deducting for depreciation. However, some insurers offer actual cash value coverage instead.
Many homeowners policies provide a separate limit for Coverage B (detached structures). These are items like gazebos, tool sheds and fences that aren’t attached to the home but are permanent on your property. They are usually insured on an actual cash value basis, although replacement cost can sometimes be purchased for a higher premium. The limit for Coverage B is normally a percentage of the total limit under Coverage A, but it can be increased for a small additional premium on some policies.
Coverage B
Other structures coverage is the portion of your homeowners policy that protects non-dwelling buildings, such as sheds and fences. These types of structures are protected by this policy limit against damage from the same kinds of disasters that can affect your house, such as fire, wind, hail, snow and vandalism. Depending on the type of policy you have (the broad form, for example), other structures may be covered against open perils such as those listed above, or specific named perils including the weight of ice, snow or sleet, sudden and accidental discharge of water or steam from household systems or appliances, damage caused by vehicles or aircraft, collapse of building structures, explosion, riot or civil disturbance and breakage of glass or plate.
In order to qualify for other structures protection, these fixtures must be separated from the primary dwelling by a clear space and not attached to it in any way. Some structures that are often included in other structures coverage include swimming pools, fences, woodsheds and detached garages. However, if you have an accessory dwelling unit (or ADU) on your property, such as a guest house or tiny home, it likely won’t be covered by your other structures limits and will need to be insured separately.
Some policies also allow you to purchase an ordinance or law endorsement that will help cover the costs of rebuilding your home to meet new codes or laws enacted since the structure was built. This is an important option to consider if you want to be sure that your other structures are adequately protected.
Coverage C
Homeowners insurance policies vary widely in terms of the coverage provided, but most provide the same basic elements. Normally, the type of structure (dwelling) and how it is used and occupied determines what coverages are available. The policy form (Broad or Special Form) also correlates to what coverages are offered. A Special Form policy is more comprehensive than a Broad Form policy and may include more perils than the standard perils listed in the policy, including earthquake and flood.
The personal property coverage in the policy, known as Coverage C, provides protection for your belongings and other structures on your residence property that are not attached to the dwelling. This includes a detached garage, tool shed and fences, for example. The personal property limit is usually a percentage of the dwelling coverage and you should conduct a home inventory and update it annually to ensure that your belongings are insured properly. You can also often increase this coverage by purchasing an endorsement to the policy.
Some policies offer an Inflation Guard Endorsement to the policy that automatically increases the personal property limit by a set percentage each year. This protects you against the loss of value of your personal belongings and ensures that your coverage is adequate in the event of a major loss. Other policy provisions to consider include whether your policy provides actual cash value or replacement cost coverage, and whether you have a deductible.
Coverage D
Homeowners insurance protects your home and belongings against damage caused by fire, theft and storms. It also provides liability coverage for injuries and property damage to others that occurs on your property. It’s important to understand the different coverages available so you can make informed decisions about the type of homeowners policy you need.
All homeowners policies provide some level of coverage for loss or damage to your home and personal property, but coverage amounts, exclusions and deductibles vary. It’s essential to review your home insurance policy carefully and discuss any questions or concerns with your agent.
In addition to covering the house and attached structures, like garages and screened porches, a standard homeowner’s policy generally covers materials being used to repair or expand your home. This includes items like lumber being used to build an addition, or a new roof being installed. However, separate structures like tool sheds, gazebos and pool houses don’t typically get covered under the dwelling portion of your policy.
Coverage D, or loss of use coverage, is designed to reimburse you for additional living expenses incurred when your home is unusable due to a peril insured against by the policy. For example, your company may reimburse you for housing costs (like a hotel room) and food expenses while repairs are being made. This coverage is normally limited to 20 percent of your dwelling coverage limit.
Coverage E
The coverages available under homeowners insurance typically include:
Coverage A, commonly referred to as dwelling coverage, covers the house and any permanent fixtures. This includes plumbing and electrical systems, ceilings, walls, etc. Coverage B covers other structures like fences and garages, and Coverage D pays for additional living expenses if your house is destroyed or damaged by a covered peril to the extent that it is uninhabitable. This could include things like increased mileage for commuting to work, food costs and warehouse storage of personal property.
Medical payments coverage is included to pay for reasonable medical expenses for persons injured by an accident on your property. It does not apply to a family member’s injuries or illness, but is intended as an emergency safety net for guests and others who may be injured at your home.
Many homeowners have valuable items in their homes, such as silverware, guns, computers, expensive jewelry and antiques. These items have limited or no coverage under standard homeowner policies, but can often be insured at additional cost through endorsements. Also, it is important to periodically review the amount of coverage on your home to make sure that it reflects any improvements or additions you have made since the original policy was written. This will ensure that if your house is completely destroyed, you have enough to rebuild it.
Medical Payments
Medical payments coverage, also known as Med Pay, reimburses others without regard to fault for medical expenses incurred from an accident on your property. Medical payments limits typically start at $1,000 per person, although higher limits are available for an additional fee. It is important to note that medical payments do not apply to the injuries of permanent residents of your household, or employees of your household (groundskeeper, housekeeper).
Homeowners and condo policies typically include personal liability coverage which reimburses you if another person is injured on your property. This coverage does not extend to the injuries of pets, which should be covered by pet insurance.
Most homeowners insurance policies include an automatic inflation guard that automatically increases the replacement cost limit of your policy each year to keep up with increasing costs. However, this may not be enough to protect you from a significant loss in the future, so it is a good idea to periodically check your coverage to make sure that it is adequate.
It is illegal for an insurance company to discriminate on the basis of race, color, religion, national origin, sex, age, ancestry, sexual orientation, marital status or disability when providing, renewing or cancelling a homeowners insurance policy. In addition, under Massachusetts law, an insurer cannot take into account your credit history when calculating your rate or determining whether to offer you a homeowners insurance policy.