Homeowners Insurance Policy And Benefits Documents

What Is Generally Covered Under a Homeowner Policy?

Arnett & Arnett, PC May 6, 2024

A homeowner's policy is a fundamental tool that acts as a financial safety net, allowing homeowners to protect their homes from unforeseen losses or damage to their property and belongings. It often comes into play when damage occurs due to natural disasters, theft, or various accidents.  

Understanding what a homeowner policy does and does not cover can help homeowners stay one step ahead of the unexpected and empower them to make informed decisions about additional coverage they might need.  

Our team at Arnett & Arnett, PC is experienced in homeowner insurance law, and we can help you explore the typical inclusions and exclusions of a standard homeowner policy. Located in Chandler, Arizona, we proudly serve clients in Phoenix, Tucson, Flagstaff, and throughout the state.  

What Does a Standard Homeowner Policy Typically Cover? 

When it comes to your home, safeguarding your assets and personal belongings against loss or damage is essential. Typically, most standard homeowner policies encompass five fundamental types of protection: dwelling coverage for your home, coverage for other structures on your property, personal property protection, liability coverage, and coverage for additional living expenses. 

Dwelling Coverage 

Dwelling coverage is a core component of a homeowner's policy that is specifically designed to provide financial protection against damage to the physical structure of your home. This includes the walls, floors, roof, and any attached structures, such as a garage or deck.  

This type of coverage is essential for repairing or rebuilding your home if it's damaged by a covered peril, such as fire, hail, windstorms, or vandalism. The coverage amount is determined by the estimated cost to rebuild your home, not its market value. In fact, many homeowner policies include replacement cost coverage. However, it's important to make sure this amount accurately reflects the current construction costs to avoid underinsurance.  

In Arizona, homeowners should consider the unique risks associated with the state's desert environment and make sure their dwelling coverage includes protection from hazards like haboobs, extreme heat, or even the sporadic monsoon. It's important to pay attention to the policy’s details, as these can vary between insurers and forms. 

Other Structures Coverage 

Other structures coverage is often included as a part of a homeowner's policy. It provides financial protection for structures on your property that are not attached to your home. This can include fences, sheds, detached garages, and even guest houses. This coverage aims to provide compensation to repair or replace these structures if they are damaged or destroyed by a covered hazard. 

Similar to dwelling coverage, Arizona homeowners should consider the state's weather patterns, including extreme temperatures, occasional flash floods, and monsoons that can cause damage to detached structures on their property. It may be advisable to consult with insurance professionals who have local knowledge and can provide guidance on adequate coverage levels. 

Personal Property Protection 

Personal property coverage helps protect homeowners from financial losses associated with the damage or theft of personal belongings within their home. This coverage extends to a wide array of items, including furniture, electronics, clothing, and other personal assets.  

In the event of a covered peril, such as fire, theft, vandalism, or specific natural disasters, this portion of the policy ensures homeowners receive compensation to repair or replace their damaged or lost belongings. 

Arizona residents should pay particular attention to policy limits and the valuation methods insurers use to compensate for lost or damaged items (actual cash value vs. replacement cost coverage). Additionally, high-value items, such as jewelry, art, and collectibles, may require additional endorsements or 'floater' policies for full coverage, given the standard policy's limits. 

Liability Protection 

Liability protection is designed to provide coverage for the homeowner if they are sued due to accidents that occur on their property that lead to bodily injury or property damage to third parties. For example, if a guest is injured in a slip and fall incident on the homeowner's property in Arizona, liability protection would cover the medical expenses, legal fees, and any awarded damages up to the policy's limit.  

This coverage extends to incidents that may be particularly relevant to the region, such as injuries resulting from encounters with the local wildlife (e.g., snake bites within the property) or extreme temperature and weather events. 

Liability protection also protects homeowners against damage that their property may cause to neighboring properties. For instance, if a tree from a homeowner's yard were to fall and damage a neighbor’s roof during a monsoon, liability coverage could address the claims from the neighbor for the property damage. 

Additional Living Expenses Coverage 

Additional Living Expenses (ALE) coverage provides financial relief when a covered peril makes a house uninhabitable. This coverage helps homeowners manage the costs associated with temporary housing, meals, and other necessary living expenses incurred while their home is being repaired or rebuilt.  

ALE coverage can play a significant role in cases of extended displacement where widespread damage affects large communities and strains construction resources. Thus, homeowners in Arizona should review their policy's ALE limits and duration to ensure they are adequately protected if their home suffers considerable damage.  

What Are Some Common Exclusions From a Homeowner Policy? 

While homeowner policies provide broad coverage, there are certain exclusions that homeowners should be aware of. These typically include: 

  1. Earthquakes and floods: Damage caused by earthquakes and floods is generally not covered under a standard homeowner policy and requires separate insurance. 

  1. Wear and tear: Damage due to normal wear and tear or lack of maintenance is not covered by most homeowner policies. 

  1. Vacant homes: If your home is vacant for an extended time, damages may not be covered under your homeowner policy. 

  1. Acts of war or nuclear hazards: These are considered high-risk events and are usually excluded from standard homeowner policies. 

  1. Business-related activities: Damages or losses that occur as a result of business-related activities conducted on your property may not be covered by a homeowner policy. 

It's important for homeowners to carefully review their policy and understand any exclusions that may apply to their specific coverage. In some cases, additional insurance may be needed to fully protect your home and belongings. 

Optional Coverage 

If a standard homeowner policy doesn't cover every aspect of a given property, optional coverage may be available to fill any gaps. Arizona homeowners might consider opting for additional policies that take into account high-value items, home businesses, and additional perils specific to the state, such as coverage for haboob damage, flash floods, or annihilation ants.  

Additionally, personal umbrella insurance can provide additional liability coverage beyond the limits set by a homeowner's policy to protect homeowners in case they are sued for damages that exceed their policy's limits.  

Seek Experienced Legal Counsel 

Understanding homeowner insurance can be challenging, especially considering the unique environment and risks to property in Arizona. At Arnett & Arnett, PC, we are experienced in homeowner insurance law and are committed to helping our clients maximize their protection while minimizing potential gaps in coverage.  

If you're unsure about your current homeowner policy coverage or have questions about securing additional protection for your property and belongings, we're here to help. Contact us today to schedule a free consultation.