Recommended Home Insurance Coverage for Seniors
Standard homeowners policies cover many perils, such as fire, theft, vandalism, and storm damage. Your coverage depends on the policy you buy.
The most common type of homeowners policy is called special form. It covers against all perils unless the policy specifically excludes a hazard by name.
For example, policies generally exclude flood and earthquake damage. However, separate flood insurance and earthquake coverage is available if you live in a high-risk area.
Types of Coverage
Thankfully, the recommended homeowners insurance coverage for seniors comes standard in most policies:
Dwelling coverage to pay for damage to your home’s structure
Coverage for other structures like sheds and fences
Personal property coverage for loss of furniture, clothing, and other items
Loss of use that reimburses additional living expenses if a covered loss makes your home uninhabitable
Personal liability coverage to protect against claims and lawsuits if someone is injured in your home
Medical payments to cover hospital bills for less severe injuries
Policy Limits
Your policy limits determine the amount of coverage your policy includes. While you have some control over the amount, it primarily depends on the rebuild cost of your home.
For example, if it would cost $250,000 to rebuild your home, you want to have a policy limit of at least $250,000.
Your policy limits for other structures, personal property, and loss of use depend on the amount of dwelling coverage.
Here’s an example of the typical policy limits, according to the National Association of Insurance Commissioners (NAIC):
| Coverage Type | Typical Policy Limit |
|---|
| Dwelling | You choose (based on home’s rebuild cost) |
|---|
| Other structures | 10% of dwelling coverage limit |
|---|
| Personal property | 50% of dwelling coverage limit |
|---|
| Loss of use | 20% of dwelling coverage limit |
|---|
| Personal liability | You choose |
|---|
| Medical payments | You choose |
|---|
Additional Coverage for Valuables
It’s important to note that policies can have lower coverage limits on valuable items. For example, a typical homeowners policy only covers jewelry up to $1,000 per item and $5,000 per claim.
So, if a fire destroys your jewelry collection worth more than $5,000, you could be left empty-handed.
However, many insurers offer add-ons to increase your coverage— insurance providers call these riders, floaters, or endorsements.
Increased Personal Liability Protection
Besides increasing your coverage for your more expensive items, you may also want to add extra personal liability protection.
If someone is hurt in your home—a dog bite, slip and fall, or another accident—a court could find you liable. In some cases, the lawsuit could be for an amount that’s more than the coverage limit on your policy.
You may be forced to sell your home and liquidate other assets, such as retirement accounts or a child’s college fund, to settle a claim if it exceeds your policy limits.
Because seniors generally have more assets than younger generations, you should consider the extra protection an umbrella policy can offer. An umbrella policy is an insurance product that supplements your home’s personal liability coverage limit.
A $1 million policy is pretty affordable, and most insurance providers stop coverage at $5 million. But Travelers offers umbrella insurance up to $10 million, and Chubb’s policies go up to $100 million.
