When you purchase or renew homeowners insurance, you’re buying coverage in case your house or personal belongings are damaged. The insurance might also cover your legal expenses if one of your guests is injured on your property, and you’re held liable.
The specifics of your coverage are contained in your homeowners insurance policy, and the home insurance declaration page, usually the first page of your policy, is the policy’s invoice. The dec page, as it’s often called, explains how much your homeowners insurance costs and how much coverage it provides.
You can review the essentials of your policy by looking at the home declaration page provided by your insurer. Here are the steps to reading and understanding it:
What is the declaration page on an insurance policy?
Your homeowners insurance company will send you a declaration page of home insurance once a year at the start of the policy’s term. Homeowners insurance policies are usually effective for 12 months.
The declaration page is a summary of your coverage under your policy. It will likely include information about you, your property, and the coverage you’re getting. It’s important to keep your homeowners declaration page for your records. You might need to refer to it when your policy expires or if your situation changes and you want to review your coverage limits.
Declaration pages are different in layout and design from one company to another, but they will all include the same information. Check out this sample for a breakdown of an insurance policy declaration page.
Part 1: Your personal information
The first part of your homeowners insurance declaration page will show the policy number and your agent’s information. Below that will be your name and address, and the company name and address of your mortgagee. Check it carefully to make sure the information is correct.
Part 2: The policy coverage period
Also, pay close attention to this part of your homeowners declaration page. It shows your policy coverage period, letting you know when the coverage takes effect and when it expires. Although you should get a renewal reminder weeks before the expiration date, it’s a good idea to know when your policy will expire so that you can renew your coverage (and avoid being uninsured) in case you don’t receive a reminder.
Part 3: Coverages, limits, and premium amounts
This is the main part of your homeowners declaration page, where you’ll find your coverage limits, the amount you’ll pay for each one, and your deductibles. The deductible is the amount that you must pay before a claim is paid.
Section I is your property divided into types of coverage.
Coverage A: Dwelling refers to your home’s structure. The limits include the amount it will cost to rebuild your home, not including the value of the land. Any structures that are attached to the house, such as a deck, are also covered.
As you see in the sample dec page, the limit is $200,000 for the dwelling with a $1,000 deductible, which means you will pay $1,000 before your coverage takes effect. The insurer will then cover damage or replacement up to the $200,000 limit.
Coverage B: Other structures covers items such as storage sheds and fencing that are not attached to the home. In the sample dec page, the premium is shown as “Incl.” meaning the cost of this coverage has been included in the dwelling premium.
Coverage C: Personal property denotes all your personal belongings. Furniture, clothing, and appliances are examples of personal property. Some of your items that have higher value—expensive electronics and jewelry—might have separate coverage under what is called a rider.
In the sample, it indicates that the personal property is covered for the replacement value, meaning the insurance company will give you the money to buy a new one. In contrast, if it had been shown as actual cash value, the policy would cover the replacement cost minus depreciation on any items.
Coverage D: Loss of use covers living expenses like food, hotel, and clothing if you need to stay somewhere other than your home while repairs are being made. In the sample home declaration page, the company will cover living expenses for up to 12 months with a limit of $40,000.
Section II shows two types of liability coverage.
Coverage E: Personal liability provides legal protection If you’re sued because of an accident on your property. The limits for this coverage typically range from $300,000 to $500,000.
Coverage F: Medical payments to others will cover the cost of medical payments if someone gets hurt on your property. The sample page indicates that up to $5,000 per person will be protected under a covered claim.
Additional coverages are the last items in this section. In this case, there is a rider for jewelry, but it could cover anything of high value, like fine art or high-end electronics. Sometimes a rider will be called an endorsement or clause, depending on the insurance company.
Part 4: Discounts
If your insurance company is giving you any discounts on your premium, this is where they will be listed.
Remember that your homeowners declaration page is a summary of your coverage and does not provide the specifics. Make sure you read the full agreement to understand the details of your homeowners insurance policy.
Have more questions? We’re here to assist you. Please reach out to an NSI representative here.