Let’s talk about homeowners insurance coverage types. When you get a homeowners insurance policy, you have some options. One of them is selecting what coverage type you want for your home. Different coverage types cover your home (protect it) from different perils. It all depends on what kind of insurance coverage you want on your home.
What are Perils?
Perils can be anything from fire to sinkholes to falling objects. They are threats to your home that you can be protected against with insurance. With a homeowners insurance policy, you choose if you want coverage for 2 perils, 9 perils, 17 perils or all risks of physical loss with certain exceptions. These four coverage types are called FL-1 Fire, FL-1 Extended Coverage, FL-2 Broad, and FL-3 Special Form.
Homeowners Insurance Coverage Types
I look at these coverage types like sunscreen. The higher the SPF number, the more you’re protected against the sun’s harmful rays. For home insurance, the higher the number of coverage type, the more perils your home is protected against.
If you want the broadest coverage, like SPF 50+, in insurance that’s FL-3 or “Special Form”. FL-3 covers you for all risks of physical loss with certain exceptions.
If you’re looking for the least amount of coverage, like an SPF 15, FL-1 covers fire or lightning and explosion ONLY. You could also get FL-1 Fire and Extended Coverage. It will cover those 3 perils plus 7 more, including windstorm or hail, riot or civil commotion, aircraft, vehicles, smoke, volcanic action, sinkhole collapse. Vandalism coverage is optional for an additional charge.
FL-2 is like SPF 30. It’s middle-of-the-road, broad coverage. It covers all 9 risks listed above plus burglary damage, falling objects, weight of ice, snow or sleet, accidental tearing apart, burning or bulging, accidental discharge of liquids or steam, freezing of plumbing or heating system, sudden and accidental electrical damage. That’s 17 perils in all
**Please Note: None of these cover flooding! Flood is not covered under your homeowners insurance policy. A flood insurance policy is a completely separate policy type. It’s a specific type of insurance for a specific type of weather. If you’re not protected against flooding with a flood insurance policy, then damage to your home from flooding is NOT covered. Find out more about whether or not you may need flood insurance.
Weighing the Cost of Insurance Coverage
Now at this point your head might be spinning. You may be asking yourself… What type of homeowners insurance coverage do I have? Is it enough? What type of coverage do I want? How much coverage do I need for my home?
Of course, you have to consider price as well. The more coverage you have, the higher the cost. Some companies will offer you a reduced price on your homeowners insurance policy by reducing the coverage to FL-1 or FL-1 Extended Coverage. Sure, your insurance will cost less, but your home will not be as well protected.
It’s always important to check your current homeowners insurance policy. Again, Special Form FL-3 offers the most coverage for you home. Your coverage is reduced from there to FL-2, FL-1 Extended, and finally, with FL-1 being the simplest coverage.
With all that said, there are a couple other factors that play into your annual premium. The duration of your policy, whether it’s 1 year or 6 months, and the amount of coverage (i.e. property value).
Request A Quote
It doesn’t hurt to ask. If you want to change the type of coverage you have on your homeowners insurance policy, talk to your insurance agent to get a quote. You may even want to shop around. Ask for quotes from a couple different insurance agencies to see if changing companies would give you the right coverage at the right price.
You have options, but we don’t want you to think you’re covered for something you’re not.
Contact us at Bruce Gardner Insurance Agency for a free, no obligation homeowners insurance quote.