Understanding Your Homeowners Insurance Policy

Most homeowners never read their policy until something goes wrong. When it does, knowing how the policy is organized makes it much easier to understand what the insurer is saying and whether it is right. This guide covers the main parts of a typical New York homeowners policy. Your own policy controls, so always check its exact wording.

The declarations page

The declarations page is the summary: who is insured, the property address, the policy period, each coverage limit and the deductibles. It also lists the endorsements, or add-ons, that change the standard policy. Start here.

The main coverages

• Dwelling (Coverage A): the house itself and attached structures.
• Other structures (Coverage B): detached garages, sheds, fences and similar structures, usually a percentage of the dwelling limit.
• Personal property (Coverage C): your belongings, often with special lower limits for jewelry, cash, art and collectibles unless they are scheduled.
• Loss of use (Coverage D): additional living expenses while the home is being repaired, and lost rent if part of the home is rented.

Replacement cost versus actual cash value

Replacement cost coverage pays what it costs to repair or replace with materials of like kind and quality. Actual cash value subtracts depreciation. Many policies pay actual cash value first and release the rest, the "holdback," after repairs or replacement are completed, often within a set time. Know which applies to your dwelling and your contents.

Deductibles

Most policies have a standard deductible. Many Long Island and coastal New York policies also have a separate hurricane or named-storm deductible, often a percentage of the dwelling limit, that applies only when specific conditions are met. Check whether the insurer applied the right one.

Endorsements worth knowing about

• Sewer and drain backup, and sump pump overflow
• Ordinance or law, which helps pay to bring repairs up to current building code
• Extended or guaranteed replacement cost
• Scheduled personal property for jewelry, art and other valuables
• Water damage and mold limitations or buy-backs

Exclusions and conditions

Exclusions remove certain causes of loss from coverage, such as flood, earth movement, wear and tear, and long-term seepage. Conditions are your obligations after a loss: prompt notice, protecting the property, providing records, sitting for an Examination Under Oath if requested, and submitting a proof of loss. Insurers generally bear the burden of showing that an exclusion applies, and exclusions are read narrowly.

Flood is separate

Standard homeowners policies exclude flood. Flood coverage comes from a separate policy, through the National Flood Insurance Program or a private carrier, with its own limits and rules, especially for basements and areas below the lowest elevated floor.

Having trouble with a homeowners claim? Request a free claim review or call 516-844-0068.

This guide is general information, not legal advice. Your policy language and the facts of your loss control.