A Homeowner's insurance policy can help protect your house, your personal contents, and your vulnerability to liability lawsuits. You'll need the basic coverages to protect you from unexpected loss or damage.
More reasons to obtain property insurance:
You need to replace, repair or rebuild. If your home were damaged or destroyed by fire or any other covered peril, you'd need the financial resources to restore it.
Bad things happen. You need liability and guest medical protection too. For example, if your neighbor slips and falls in your kitchen, you might need these coverages to help pay for lawsuits or medical expenses.
You have special items. Protect more than your home; protect valuables such as jewelry, silverware, business property, cameras, cellular phones and more with extended coverage options.
It is a mortgage requirement. Although hazard insurance is not required by law, as is auto insurance, you can not close on a new loan without proof of insurance. We work directly with your lender to provide all the necessary paperwork to ensure a smooth closing process.
Protect your assets, possessions, home and your family. Call us for a better understanding of what coverages are right for you, and find out whether you are eligible for significant discounts and credits on your policy.
What is homeowners insurance and who should buy this type of coverage?
Homeowners insurance is one of the most popular forms of personal lines of insurance on the market today. The typical homeowners policy has two main sections:
Section I can provide coverage to the property, personal contents, the rental income, or loss of use, of the insured.
Section II can provide personal liability coverage, and personal injury protection to the insured.,as well as medical expenses to others.
Almost anyone who owns or leases property, whether owner or tenant occupied, has a need for this type of insurance.
What is the difference between "actual cash value" and "replacement cost"?
Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. When "actual cash value" is used, the policyowner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policyowner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.
It is always advisable to go with the replacement cost option.
What are the policy limits (i.e., coverage limits) in the standard
homeowners policy?
The policy limit for the Dwelling, or Other Structures is set by the policyowner at the time the insurance is purchased. The policy limit on Personal Contents is usually equal to 50% of the dwelling limit. Loss of use, or Rental income covers the additional expenses that the policyowner may incur when the residence cannot be used because of an insured loss. This limit is generally calculated at 20% of the dwelling limit. The coverage limit on Personal Liability is determined by the policyowner at the time the policy is issued. The coverage limit on Medical Payments to Others is usually set at $1000 per injured person.
Your personal contents, which provides named perils coverage, applies to all your personal property (except property that is specifically excluded) anywhere in the world. For example, suppose that while traveling, you purchased a mattress and you want to ship it home. Your homeowners policy would provide coverage for the named perils while the mattress is in transit - even though the dresser has never been in your home before.
Valuables such as jewelry, silver, furs, antiques, and fine arts need to be appraised and added as a rider to your homeowners policy. An additional premium is assessed to the policy per $100.00 of appraised goods.
The U.S. Congress established the National Flood Insurance Program in 1968 to provide protection for property owners against potential losses arising from a flood. The term flood is defined as a general and temporary condition of partial or complete inundation of normally dry land areas from overflow of inland or tidal waters or from the unusual and rapid accumulation or runoff of surface waters from any source.
A flood policy is a stand alone policy that needs to be purchased in addition to regular hazard insurance. The flood policy will cover only direct physical flood damage to the dwelling or structure insured. Flood insurance rates are set by the National Flood Insurance Program (NFIP) so your NFIP policy will cost the same regardless of the issuing company or agent.
You don’t have to be located alongside a river, lake, or ocean to need flood insurance. In fact, according to the National Flood Insurance Program, nearly 25% of flood claims occur in areas designated as “non-flood hazard” zones.
The fact is, a flood could happen to you. Flooding causes more than $2 billion in property damage each year; and losses due to flooding are not covered under most homeowners or business policies.
Flood insurance coverage is an asset to you; it reimburses you for financial losses from flood damage. Be sure flood doesn’t dampen your most treasured item, Your Home or Business!
Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. However, unless you live in an area that is prone to earthquakes, you probably do not need this coverage. If you do live in a part of the country with high earthquake activity you may want to consider adding an earthquake endorsement to your homeowners insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements.
What factors should I consider when purchasing homeowners insurance?
There are a number of factors you should consider when purchasing any product or service, and insurance is no different. Here is a checklist of thing you should consider when you purchase homeowners insurance. First and foremost, purchase the amount and type of insurance that you need. Remember that if your policy limit is less than 80% of the replacement cost of your home, any loss payment from your insurance company will be subject to a coinsurance penalty. Also, determine the amount of personal property insurance and personal liability coverage that you need. Second, determine which, if any, additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement or the backup of sewer and drains endorsement? Finally, once you have decided on the coverage you want in your homeowners insurance policy, you can now decide which insurer you would like to purchase the insurance from. Some people like the idea of purchasing insurance from a mutual company rather than a stock company. Dealing with an insurance agent can simplify the process by getting professional assistance in your purchasing decision.
What is the difference between an "all risks" policy and a "named perils" policy?
A named perils policy covers losses that are due to only those perils listed in the policy, and are usually classified as basic or broad form. The perils typically covered include fire, windstorm, hail, and other direct physical losses.
An all risks policy covers losses that are due to any peril except those specifically excluded in the policy, usually classified as special form. It is important to note that all risks policies provide broader protection than do named perils policies.
It is always advisable to go with the special form coverage, if it is available.
What can I do to lower the cost of my homeowners insurance?
There are a number of things you can do to lower the cost of your homeowners insurance. Like everything else in life, you generally get what you pay for. Although prices may vary drastically by company, most often the coverages provided are not comparable. Rather than reducing your coverage limits, a good way to lower the cost of your homeowners insurance is to look for any discounts that you may qualify for. For example, many insurers will offer a discount when you place both your automobile and homeowners insurance with them as a package policy. Other times, insurers offer discounts if there are deadbolt exterior locks on all your doors, or if your home has a security system. Be sure to ask your agent about any discounts that you may qualify for. Another easy way to lower the cost of your homeowners insurance is to raise your deductible. Increasing your deductible from $250 to $500 will lower your premium, sometimes by as much as 5 or 10 percent. However, be careful to make sure that you have the financial resources necessary to handle the larger deductible.
If I there’s been damage to my property which I think is covered under my homeowners policy, what should I do?
Insurance contracts are conditional contracts, which means that policyowners have certain duties that they must perform if a covered loss occurs. Failure to complete these actions can, and sometimes does, result in non-payment by the insurance company for losses that otherwise would have been covered. Required duties include: (1) notifying the insurance company or the agent that a loss has occurred - this should be done as soon as you discover the loss; (2) protecting the property from further damage and/or making any repairs necessary to prevent further damage; (3) preparing a detailed list of the personal items damaged which contains a description of the items, their actual cash value, or their replacement cost if you have added the replacement cost endorsement to your policy; (4) being prepared to show the company and/or the insurance agent the damaged items; (5) completing a a statement for the insurance company that details the events that led to the loss - for example, the time the damage occurred, the cause of the losses, etc.
In the unfortunate event that you are sued, your homeowners policy will not only cover the cost of your legal defense, but your insurance company will also provide the legal counsel.
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