The Story of Bill The Friendly Giant and an Unlucky Homeowner Who Learned How to Read His Insurance Policy.
Once upon a time…
…there was a huge, friendly giant named Bill. Normally Bill The Friendly Giant is a very happy, fun-loving giant who likes to work on his yard and play with his kids. But unfortunately, we are catching him at a bad time because he is having a very rough day. We don’t really know why though.
Perhaps mice got into his magic bean collection, or maybe Mrs. Bill was unhappy he left the toilet seat up again. It could also be that Bill lost his sock in that mysterious black hole that’s in the back of everyone’s dryer or maybe he simply hasn’t won his fantasy football league despite playing for 32 years and counting.
Whatever the reason, Bill is grumpy today, which doesn’t bode well for our unsuspecting homeowner.
To make matters a bit worse, our homeowner is having friends over for lemonade and ice cream when Bill comes walking by and takes a look at our soon-to-be-destroyed home. Gazing down, he decides to take out his frustrations on a very quaint 3 bedroom, 2.5 bathroom ranch home on 1 acre with a detached garage, rose garden and a Shed.
Reaching down with his giant paw-of-a-hand, Bill picks up the house and rips it off the ground - Foundation and all. He then turns to his right, looks down at the neighbor’s empty lot and shakes the house so all the items inside the house that are not permanently attached fall to the ground in a big pile (our homeowner’s guests fall out of the home as well but land on a mattress to soften their fall.) After seeing the mess he’s created, Bill The Friendly Giant feels terrible and places the home back down but obviously the damage has been done. At the same time, our homeowner needs a little help understanding the basics of their insurance policy. Loti can help…let’s talk about it.
Declarations Page
After ensuring everyone is safe, our homeowner opens their Declarations Page - or “Dec Page”. This is the first page or two of their homeowner’s policy that summarizes the dates that a policy is active, the associated Premium and the major coverages.
Primary Dwelling
The home that Bill picked up, along with everything permanently attached to the home like roofs / windows, plumbing / lighting fixtures and cabinets / flooring is protected under your Primary Dwelling coverage or Coverage A. The terms vary slightly between insurance carriers but they all mean the same thing.
Secondary Structures
All the structures that were left behind - like the detached garage, shed, and any fencing are covered in Secondary Structures / Coverage B. That said, the trees, lawns and plants that may have been destroyed in the process - like the rose garden - are generally covered under a Landscaping provision that would not be found on the Declarations Page.
Personal Property
The items that fell out of the house (not including his somewhat traumatized but relatively safe house guests) including furniture, clothing and home goods are covered under Personal Property / Coverage C.
Loss of Use / Additional Living Expenses
Because our unlucky homeowner no longer has a place to live and lost use of his home, additional expenses related to those needs such as rent, laundry and additional travel expenses are covered under Additional Living Expenses (“ALE”) / Loss of Use / Coverage D.
Section II: Personal Liability Coverage & Medical Payment Coverage
Finally, if the injuries suffered by the house guests were major or traumatic and they hire a lawyer (though it’s a bit unclear what case they would have against Bill), the homeowner’s legal expenses would be covered under Section 2 - Liability / Coverage E. If the injuries were minor - like a sprained ankle or cuts requiring stitches - then those medical bills would be covered under Section 2 - Medical for Others / Coverage F.
Peril
Of course all of this may or may not be covered by the homeowner’s insurance carrier depending on whether they have a “Named Perils” or “Open Perils” policy. We’ll get into perils as well, but suffice to say Bill The Friendly Giant is not one of the named perils, so hopefully our unlucky homeowner has an Open Perils policy that would cover the damage. There are a variety of other endorsements and exclusions we will cover in the ensuing chapters, but for now let’s conclude this somewhat ridiculous fairy tale.
After a long climb up the beanstalk, Bill The Friendly Giant went home to a frustrated spouse, but the homeowner was covered and was able to use Loti to help rebuild their lives. Even the guests were happy to have a crazy story to tell their grandchildren so everyone lived happily ever after...except Bill, who still hasn’t won that elusive fantasy football trophy.