Understand Coverage A-E for your Home Insurance

May 2

4 min read

Home insurance policies are typically structured into various coverage categories, often labeled as Coverage A through E. Each coverage section serves a specific purpose and protects different aspects of your home and belongings. Below is an explanation and expansion of each coverage type:

Let's start!

Coverage A – Dwelling

What it covers: The physical structure of your home: walls, roof, foundation, built-in fixtures, and attached structures like garages or patios.
Example: A wildfire damages your roof and part of the interior. Coverage A pays to rebuild your home, including materials and labor.
Tip: Make sure your coverage reflects local rebuild costs, not the home’s market price. Costs in CA can exceed $300–$500 per square foot. At George Park Insurance Agency. We have tools to help you evaluate your replacement cost. Feel free to let us know if you need a replacement cost estimator to be used for your property.

Coverage B – Other Structures

What it covers: Detached structures like sheds, fences, gazebos, detached garages, and pool houses (not the pool itself).
Example: A windstorm knocks a tree onto your detached garage. Coverage B pays for the repairs to the garage.
Important Insight! If the detached garage or unit has a kitchen or is used as a rental (ADU), it’s not covered under B. It may need a separate policy.
Tip: Typically capped at 10% of Coverage A, but you can increase limits if you have valuable detached structures.

Coverage C – Personal Property

What it covers: Your belongings: clothing, electronics, furniture, tools, appliances anywhere in the world.
Example: During an evacuation for a wildfire, your home is looted and electronics are stolen. Coverage C pays for replacement of stolen items.
Insight: Most policies limit high-value items like:
- Jewelry (~$1,500)
- Art (~$2,500)
- Collectibles, cash, and instruments—limits vary
Tip: Add a scheduled personal property endorsement for full protection of expensive items and request Replacement Cost coverage.

Coverage D – Loss of Use / Additional Living Expenses (ALE)

What it covers: Cost of temporary housing, increased meal expenses, and even laundry or pet boarding if you can’t live in your home due to a covered claim.
Example: After a kitchen fire, your house is uninhabitable. ALE pays for a short-term rental and dining out expenses while repairs are underway.
Tip: In wildfire-prone areas, request Actual Loss Sustained coverage for 12–24 months minimum, since rebuilds can take a long time in CA. This coverage sometimes is optional.

Coverage E – Personal Liability

What it covers: If someone is injured on your property or you’re responsible for damage to someone else’s property.
Example: A guest slips on your wet deck, breaks their arm, and sues. Liability covers medical costs, legal fees, and settlement payouts.
Tip: Minimum should be $300,000 to $500,000. If you have assets, get an umbrella policy for higher limits (often $1–5 million). At George Park Insurance Agency you can request up to $1,000,000 personal liability coverage without umbrella policy. Please note that this is subject to your risk eligibility.

In addition to coverage A-E, which you will find on each of your policies, here are some additional terms that may help you understand your coverage and payouts.

Coverage F – Medical Payments to Others

Covers: Small medical expenses (usually $1,000–$5,000) if a guest is injured on your property, regardless of fault.
Example: A friend trips on your front steps and needs stitches. Coverage F pays the ER bill.
Tip: This is no-fault coverage. It helps avoid lawsuits by covering minor incidents quickly.

AOP Deductible (All Other Perils Deductible) – Definition

What it is: The standard deductible you pay before coverage kicks in for all non-catastrophic losses (e.g., theft, vandalism, pipe burst).
Example: If you have a $1,000 AOP deductible and suffer $5,000 in water damage from a burst pipe, you pay the first $1,000, and insurance pays $4,000.
Important: Some policies in California may have separate, higher deductibles for wildfires or wind/hail, especially in high-risk ZIP codes.
Tip: The larger the deductible, the lower your premium will be.

Personal Injury (Optional Endorsement)

Covers: Legal liability for non-physical harm like libel, slander, defamation, wrongful eviction, or invasion of privacy.
Example: You’re sued for defamation over a social media post.
Tip: Not automatically included in liability coverage, request this as an endorsement, especially if you have tenants or post online.

Water Backup (Optional Endorsement)

Covers: Water damage caused by backed-up sewers, sump pumps, or drains: a common exclusion in base policies.
Example: Your basement floods due to a backed-up drain.
Tip: This is not covered under regular water damage. Add this endorsement, especially in older homes.

Water Damage (Standard but Limited)

Covers: Sudden and accidental water damage, like pipe bursts or water heater leaks.
Example: A burst pipe floods your living room.
Excludes: Long-term leaks, poor maintenance, or flooding (needs separate flood insurance).
Tip: Inspect plumbing regularly and consider adding leak detection discounts.

Wind and Hail

Covers: Damage from windstorms, hail, or falling trees (unless specifically excluded in your ZIP code).
Example: A windstorm damages your roof shingles and rain seeps in.
Tip: Some fire-prone or coastal California areas may exclude or surcharge for wind/hail. Check your policy carefully.

Theft

Covers: Theft of personal items from your home, car, or even while traveling.
Example: Someone breaks into your home and steals electronics.
Limits: Sublimits apply to items like jewelry, cash, firearms, etc.
Tip: Keep an inventory and consider endorsements for high-value belongings.

We hope this outlines the majority of the coverage we offer to our clients. If you have any questions, please don't hesitate to ask your agent to clarify each coverage option before you make a purchase.