This is Part One in a series of four posts discussing Homeowners insurance policies, including terms and conditions in such policies that homeowner insureds should keep in mind, whether in obtaining insurance or in the event of claim or potential claim.
Homeowners’ policies are unique in that they can provide both “first-party” coverage (i.e., the policies cover certain damage to your home and its contents) and “third-party” coverage (defense and indemnification against claims brought by others for injuries sustained on your property).
These policies can also be confusing because they comprise dozens of pages and include numerous different types of documents, most of which insureds have not studied in detail when coverage is issued and do not typically negotiate.
There is typically the following: (1) a cover letter from the insurer transmitting the policy to the insured upon issuance or renewal. This cover letter contains the policy number and a summary of coverages or any changes on renewal; (2) any statutory or other notices to the insured; and (3) a policy “Declarations” page, which is a summary of the policy’s terms and conditions.
The Declarations page can be a helpful reference and summary for the insured. It should identify the types of coverage in the policy (e.g., Coverages “A” through “F”), along with coverage limits applicable to each of the coverage parts.
In Connecticut, Coverage Parts “A” through “F” are as follows:
Coverage A: Dwelling
Coverage B: Other Structures
Coverage C: Personal Property
Coverage D: Additional Living Expenses
Coverage E: Personal Liability
Coverage F: Medical Payments
The “policy” itself typically includes form policy language that details the coverage, starting with an identification of what types of risks are covered by each of the Coverage Parts. The policy also includes “Endorsements” (additional forms) attached to the policy that can modify, limit, or enhance specific aspects of the coverage provided.
The terms and conditions in homeowners’ policies can be a source of confusion even for savvy homeowners. Insureds have a right to fair, good faith claims handling and claims determinations but the process can be daunting and confusing. The stakes can also be very high in the context of many homeowners, for instance where there has been a devastating fire or where a visitor to one’s home suffers a serious injury on the insured premises and may retain counsel and file suit. Because of these issues and the serious financial stakes, insureds are advised to consult with experienced insurance counsel early in the claims process.
The next three parts of this series of posts will address (1) Specific terms and conditions in homeowners policies that are commonly the subject of disputes; (2) the use of third-party adjusters in the context of fire and other losses; and (3) the “Appraisal” process.
This content is provided as background and does not constitute legal advice. The attorneys at our firm have many years of experience with insurance coverage issues in Connecticut, New York and elsewhere. For more information or to schedule a free consultation, contact us at info@lalorattorneys.com / 646.818.9870.
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