About Homeowner’s Insurance
It's your home and you want to protect it with the right homeowner's insurance policy. To do this it's important to understand what a standard homeowner's insurance policy includes. There are four key components consisting of:
Coverage for the structure of your home.
Coverage for your personal belongings.
Living expenses in case you are temporarily unable to live in your home due to a fire or other insured disaster.
1. Your House
This part of your policy generally pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in your policy. It generally does not pay for damage caused by a flood, earthquake or just wear and tear. When purchasing coverage for the structure of your home, make sure to buy enough to rebuild your home. Also, review this coverage on an annual basis to make sure you have sufficient coverage.
2. Your Personal Belongings
Your furniture, clothes and other personal belongings are usually covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage between 50% to 70% (this is just an average, every policy is different) of the amount of insurance you have on the structure of your home. The best way to determine if this is sufficient is to conduct a home inventory, in case you need to increase your coverage. If you have questions about what is covered by a specific policy, contact us.
This part of your policy may also include off-premises coverage, which means that your belongings are covered anywhere in the world, unless you have decided against this coverage.
Expensive items such as jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen. To insure these special items to their full value, consider purchasing a special personal property endorsement or floater and insure these items for their appraised value.
Trees, plants and shrubs are also covered under standard homeowners insurance. They are protected against theft, fire, lightning, explosion, vandalism, riot and even falling aircraft. They are not covered against damage by wind or disease.
3. Liability Protection
Liability protects you against lawsuits for bodily injury or property damage that you or family members cause to someone else. It also pays for damage caused by your pets. So, if your child or dog accidentally breaks something in your neighbor's yard, you are covered. The liability portion of your policy also pays for both the cost of defending you in court and any court awards—up to the limit of your policy.
Liability limits generally start at about $100,000. Many recommend that you have up to $300,000 in coverage. Some people feel more comfortable with more coverage. You can also purchase an umbrella or excess liability policy which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits.
Your policy also provides no-fault medical coverage. If a friend or neighbor breaks an ankle playing basketball in your back yard, he or she can simply submit medical bills to your insurance company. Expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage.
4. Additional Living Expenses
If your home is damaged because of a fire, storm or other insured disaster and you can't live in it, this coverage pays the costs of living someplace else while your home is repaired or you find another place to live. While your home is being rebuilt, hotel bills, restaurant meals and other living expenses are covered. Coverage for additional living expenses differs from company to company.
Footnote: This is a brief overview of the coverage that can be included in a Homeowner's Insurance policy. You should read a policy thoroughly before purchasing any insurance policy.
Renters Insurance 101
Are you renting an apartment? If so, keep in mind that it’s up to you to protect your personal belongings from damage or theft with renters insurance.
Your landlord insures the building in which you live. However, it’s up to you to protect what is inside your apartment? As a renter, you need insurance to cover your personal things, such as clothing, furniture or electronic equipment.
Plus, renter's insurance protects you if someone gets hurt in your apartment or breaks something. For example, a friend visits your apartment and trips over a rug, breaking an arm. Not only may your renters insurance cover the medical costs (depending on the policy) but also the cell phone your friend broke when tripped.
Personal Property Coverage
A renter's policy protects your things, such as an iPod or computer, from theft in your apartment or anywhere in the world. The coverage may extend to fire damage, weather damage, explosion, smoke, vandalism, and plumbing leakage.
An independent agent can help you if you have questions as to the amount of coverage that's right for you. Or, you can use an inventory of your possessions to determine the value of your property.
Additional Property Coverage Options
Depending on the extent of your possessions, you may require additional coverage for your individual needs. You can buy additional coverage for the following:
Contents Replacement Cost: pays to repair or replace most personal property in your apartment with no deduction for depreciation.
Valuable Items Plus: provides higher limits and worldwide protection for special property such as jewelry, fine art, cameras, computers, and musical instruments for an extended variety of losses.
Additional Coverage Endorsement (ACE): extends protection or increases limits on special types of property (for example: jewelry or silverware). This coverage also increases personal liability coverage by $100,000 and includes coverage for personal injury.
Personal Liability Protection
If you are sued, your renter's personal liability protection helps cover the associated legal costs and related damages. Most renters policies provide $100,000 (minimum) of financial protection against liability claims and/or lawsuits brought by others for accidental bodily injury or damage to their property while in your apartment , as a result of your personal activities, including most sports, or caused by your children or pets.
Additional Living Expenses
If you must move out of your apartment for a period due to a covered hazard such as fire, the policy might pay you up to 20% of the contents coverage for necessary additional living expenses (hotel, meals, laundry, etc.) while your damaged apartment is being repaired.
Many renters spend considerable time and money on alterations or redecorating. Under a renter’s policy, you may apply for up to 10% of your contents coverage to repair or replace these damaged improvements.
Conducting A Personal Property Inventory
It's important to inventory your apartment and possessions. It will save you precious time and frustration later. A personal property inventory is important because it:
guarantees that you have sufficient coverage
makes it easier for you to file a complete and prompt claim, supported by accurate documentation
What Is A Personal Property Inventory?
A complete inventory includes the following information about each item on your inventory list:
The room in the house where it's located
Item description and quantity
Place of purchase
Estimated current value
Serial and model number (if applicable)
An accompanying photographs of each item
Receipts and current appraisals for the most valuable items
No one can ever be prepared for a loss due to theft or damage, but make sure you take the necessary steps to reduce the stress from the aftermath. It’s only after a loss, that many people find out they were not sufficiently covered.
Umbrella Insurance – An Extra Step To Peace Of Mind
What is peace of mind worth to you? For some, it’s knowing that they are protecting their assets and future with personal umbrella liability insurance.
Umbrella insurance is designed to give you added liability protection above and beyond the limits on your homeowners, auto and other personal insurance policies. With an umbrella policy, depending on the insurance company, you can add between $ 1 to 5 million in liability protection. This protection is designed to take over when the liability on other current policies has been exhausted.
What Does This Really Mean?
Liability insurance is the portion of a homeowners or auto policy that pays for expenses such as the injured person’s medical bills, lost wages, or damages to a car due to the person at fault. The liability portion of an insurance policy also covers legal expenses if the negligence results in any court proceedings. After adding up all of the medical expenses for the injured and the legal fees, the standard liability in one’s homeowners or auto policy may be sufficient.
Almost every state has financial responsibility laws that hold drivers accountable for bodily injury and property damage due to a car accident for which the at-fault driver could be sued for damages. Consequently, personal assets from the at-fault driver could be seized as a result of a lawsuit. Similar laws are in force for home, watercraft and motorcycle owners.
A personal liability umbrella insurance policy gives you added liability protection without much added cost. Having the added protection of an umbrella policy is coverage you shouldn’t think twice about –especially for the extra peace of mind it provides.
How Much Homeowners Insurance Do You Need?
When buying a home you think about the mortgage and the bills associated with owning a home. But, just as important is to figure out what your homeowners insurance will cost.
It's especially to figure out the cost of homeowners insurance to get an accurate budget your living expenses.
What is the right amount?
The simple answer is that it depends. There are several factors that can determine how much you will pay for your homeowners insurance.
Choose a Deductible That's Right for You
Just like with a car, your deductible will impact the cost of your homeowners insurance. If you pick a plan with a high deductible, the annual fee for your insurance coverage most likely will be lower. However, if you have to make a claim for repairs to your home, your out-of-pocket cost will be higher. On the other hand, a low deductible will probably cost you more up front, but you will pay a smaller amount if you have a claim.
Determine the Value of Your Home and Property
If you're buying an insurance policy to cover a home that's worth $250,000, you're going to pay more than someone whose home is worth half that amount. A solid assessment of what your home is worth will help determine the right amount of coverage you need.
The value of your personal belongings also has a lot to do with the value of your home. If you're living in a home worth $150,000, but your belongings that are worth $50,000, you will will want a policy that covers both these amounts. Otherwise, if something happens, you could still be at a loss, even with insurance coverage.
Your Claim History
Unfortunately, the price you pay for homeowners coverage can also be affected by your past insurance history. Homeowners who had fewer claims typically pay less for insurance than those who have more claims. One of the considerations that all insurers have to keep in mind is your level of risk to the insurance company.
Are you buying an older home or a new home? That too will impact your policy.
Is your electrical and plumbing reliable?
Is the house built to specific codes for maximum safety?
Do you own a dog? If so, what breed?
There's so much that goes into determining the cost of homeowners insurance. It's definitely worth contacting us to help determine the coverage that is right for you and within your budget.