Homeowners Insurance

Declarations Page: Deconstructed

If you have property insurance, then you most likely have a declarations page to go along with it. It’s that document you get in the mail once a year, showing you information that you have no idea what it means.

Let’s change that starting now! Here is a sample declarations (dec) page for you to follow along. Click here.


LET’S BREAK OUR SAMPLE DECLARATIONS PAGE DOWN

Section One:

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  • The top of your dec page lists your insurance company ( also known as the insurer) and the claims number. Keep that number handy in the event you have a claim.
  • Directly below the insurance information, you should have your name or your significant other. Make sure to have both your name and your legal (has a financial interest in the property) significant other listed on the policy. You are known as the named insured(s).
  • Your mailing address is under the named insured.
  • To the right of the mailing address, you will see the policy period, typically 12 months, with an effective and expiration date.
  • The information listed on the declarations page is only valid during the policy period. If you file a claim in that policy period, the below information on the dec page will apply. (We are getting to that).
  • Your insurance agent’s contact information is under “Agency Information.”
    • If you have questions or need to change something on your policy, you will need to call your agent directly.
  • A crucial aspect of this declarations page is what address is listed under “Residence Premises.” This address must match the physical address that you are requesting to be insured.
  • If the address is incorrect, you must call your agent immediately.
  • Lastly, you will see your policy form listed.
    • The policy form could be on the last page of versus the front page.
    • The policy form tells you exactly what insurance form is providing you coverage.
    • An insurance form details everything that is and is not covered.
    • It also provided crucial definitions.
    • This form should have been given to you by your agent.

Section Two:

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Let’s take a look at the deductibles that will apply in the event of a loss.

A deductible is the amount of money paid by the policyholder (named insured) before the insurance company issues any funds. Your loss must exceed your deductible prior to the insurance company sending a check.

  • Typically the deductible will be subtracted from the insurance company’s estimate of damages provided by the adjuster.
  • You, the named insured, would pay the contractor of your choice the deductible amount which would satisfy the claim.

Most homeowner policies have two deductibles listed: all other perils and a hurricane (or sometimes referred to as named storm) deductible. You may also see a separate wind/hail deductible listed.

Depending on your geographic location, you may see a specialized deductible. I’m from the south and the majority of our policies include both all peril and hurricane deductibles.

Hurricane Deductible

  • A hurricane deductible (named storm) will apply in the event of an official named storm that makes landfall during a specified time frame. The specified trigger varies depending on the state and insurance company.
    • For example, if the trigger is 24 hours before landfall, then the hurricane deductible would apply if the hurricane damages your home 24 hours before or on the day of landfall.
    • A hurricane deductible is commonly a more substantial amount than the “all other perils” deductible.
    • In the event you see a percentage versus a dollar amount, the deductible amount would be the percentage of Coverage A.
    • Example: Coverage A limit of liability listed on the dec page is $255,000; with a 5% deductible, you would be responsible for $12,750.

Wind/Hail Deductible

  • A wind/hail deductible is the amount that will apply in the event of an everyday windstorm or hailstorm.
    • If you do not have a separate hurricane or named storm deductible on your policy, then the wind/hail deductible may apply. You will need to verify with your insurance company.

All Other Peril Deductible

  • All other perils deductible refers to every risk that is covered excluding hurricanes/ named storms.
    • A few examples of all other perils include water, fire, and theft claims.

When choosing a deductible amount, keep in mind that if you do have a claim, you will need to have these funds available to assist you in the repair process.

Read more about filing a claim here.

Typically the higher the deductible, the lower the premium. Always have your agent give you the option and show you what options are available in your area. Check out this article about insurance premiums.

Under the deductible section, you will see Section 1- Property Coverages.

  • Coverage A – “Dwelling” refers to your physical house.
  • Coverage B- “Other Structures” refers to detached structures such as fencing and outdoor sheds or buildings.
  • Coverage C- “Personal Property” refers to your house contents.
    • If you were to move today, what would you pack in the moving truck? The answer is your contents. Read more about personal property here.
  • Coverage D- “Loss of Use” refers to expenses associated when a loss displaces you from your home.
    • If a fire destroys your home, and you must live in a rental unit until the repairs are complete; te rent you pay while still paying your mortgage would be considered under loss of use.

Limit of Liability shows the maximum dollar amount the insurance company will pay in the event of a loss.

Let’s say a hurricane causes significant damage to your property. Based on our sample dec page, the maximum insurance would pay for your:

  • house (such as roof damage and the interior water damage) – $255,000.
  • fence-$25,000.
  • contents- $127,500.
  • temporary housing- $51,000.

The annual premium is the amount your agent charges to provide you with coverage.

Section II- What’s covered under liability Coverages- E and F.

Nationwide (www.nationwide.com) explains it perfectly: Personal liability occurs in the event an accident, in or out of your home, that results in bodily injury or property damage that you are held legally responsible for. Personal liability claims could include medical bills, legal fees and more if a guest is injured on your property, as well as coverage for accidental damage you are legally responsible for on someone else’s property. If you have personal liability coverage, you may be able to avoid paying out of pocket for incidents like these, up to your coverage limits.


Section Three:

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Optional coverages are additional coverage allowances in the event coverage is not provided in the main policy form, or the limit of liability amount is not sufficient for your individual needs. Speak to your agent about what options are available.


Section 4:

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Additional Coverages/Endorsements/ Exclusions are included in your premium, unlike optional coverages.

  • Policy endorsements add coverage, and policy exclusions remove coverage away from the main policy form. Regardless of what the main policy form reads, endorsements and exclusions override.
  • Personal Property Replacement Cost Coverage is a typical endorsement that gives you the full cost of your loss to contents versus a depreciated value know as actual cash value. Read more about personal property here.
  • Endorsements and exclusions vary depending on where you live.
  • You should have received a copy of each endorsement and exclusion. If you cannot locate these documents, call your agent now. Review the wording and call or email your agent with questions, so you know your coverage before a loss.

Section 5:

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Discounts/ Surcharges allows a lower premium based on the details of your home.

For example: having a paid monitoring alarm system would aid in the event of a theft of fire. Having this feature could save potential damage to your home, which helps the insurance company and rewards you.


Section 6:

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The most self-explanatory section is mortgage information. Your current mortgage company must match what’s on your policy. Your mortgage company has a financial interest in your home and could very well be on your claim check.


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