A home insurance policy consists of four main coverages: dwelling, personal property (contents), detached private structures and additional living expenses.
The Single Limit clause is an option you can add to your home insurance policy which allows you to combine (or shift) the limits of each of those four coverages mentioned above.
Lets create a sample home insurance policy.
Coverage A Dwelling: $150,000
Coverage B Detached Structures: $50,000
Coverage C Personal Property: $ $50,000
Coverage D Additional Living Expenses: $20,000
Using the figures above, lets assume you are sent out to a hotel for several months and the additional living expenses coverage limit of $20,000 is exceeded by $10,000. This is where your single limit endorsement will allow you to shift the $10,000 from one of the other coverages which weren’t exhausted to cover the shortfall.
Be sure to check your home insurance policy and ensure you have the Single Limit endorsement added. It’s very inexpensive and can save you from a big headache.