Masterfile
A home insurance “policy limit” is the maximum amount of money you can get on a claim. But all limits aren’t the same—so it’s important to pay attention to them so you can avoid unwelcome surprises.
To help you better understand your home insurance, here are four types of limits and what they mean:
1. Dwelling Limit
This is the maximum that will be paid when a damaged home is declared a total loss. It also covers structures that are attached to your home, such as a garage, front porch or deck. It’s a good idea to work with your agent to determine the home’s replacement cost, which is what it would take to rebuild the house, to ensure you have adequate coverage.
2. Sublimits
How savvy are you when it comes to your homeowners insurance? Knowing these points can help protect your property and yourself.
Read MoreThese are the maximum amounts that will be paid on specific kinds of possessions, such as jewelry, business equipment and freestanding structures on your property. If you own property of this type that’s worth more than the sublimit that covers it, talk to your agent about adding an endorsement to your policy to increase the coverage.
3. Liability Limit
If you’re held responsible for another person’s property damage or bodily injury, such as when a limb from your tree falls on a neighbor’s car or your dog bites someone, this is the maximum amount that your policy will pay. For additional coverage above the liability limit, consider buying a personal liability umbrella policy.
4. Time Limits
These are conditions listed in a policy that must be met in order to receive full coverage. They can, for example, specify the length of time you have to pay your insurance premium or report a loss.
For answers to any questions you may have, and to adjust coverage, schedule a policy review with your agent.
