Homeowners Insurance

Because everyone's needs are not the same, it is best to consult your agent to help assess your needs and find the insurance policy that is right for you.

What is Homeowners insurance?
Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it.

Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets.

Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.

Why do you need homeowners insurance?
It is really all about protecting yourself financially if something unexpected happens to your home or possessions. That's important because chances are your home is likely one of your largest investments.

• If your home was destroyed by fire or damaged by a natural disaster, you'd need money to repair or replace it.
• If a guest in your home is injured, liability protection and medical coverage help pay expenses.
• If you are a victim of theft and vandalism, it can reimburse you for your loss or pay for repairs.
• If you are still paying for your home, your lender will require insurance.

It is important to know that homeowners insurance is meant to cover unexpected damage, not routine maintenance. Ask your agent to talk about what is covered and be sure to read your policy so you know exactly what's included and what is not.

Three ways to insure the structure of your home:

1. Replacement Cost. Insurance that pays the policyholder the cost of replacing the damaged property without deduction for depreciation, but limited to a maximum dollar amount.

2. Extended Replacement Cost. An extended replacement cost policy, one that covers costs up to a certain percentage over the limit (usually 20%). This gives you protection against such things as a sudden increase in construction costs.

3. Actual Cash Value. This covers the cost to replace your home minus depreciation costs for age and use. For example, if the life expectancy of your roof is 20 years and your roof is 15 years old, the cost to replace it in today's marketplace is going to be much higher than its actual cash value.

Two ways to insure your personal belongings:

1. Replacement Cost Coverage. Insurance that pays the dollar amount needed to replace damaged personal property with items of like kind or quality without deduction for depreciation.

2. Actual Cash Value. Insurance under which the policyholder receives an amount equal to the replacement value of damaged property minus depreciation. Unless a homeowners policy specifies that property is covered for its replacement value, the coverage is for actual cash value.

Things to consider and questions to ask your agent
Here are few things to discuss with your agent that will influence your decisions.

• How much will it cost to rebuild my house and replace my belongings if they are damaged or destroyed? (Ask your agent to talk you through your home's features and the things you own so you can make an informed decision about coverage.)
• Does the insurance company have a good reputation for customer service? Is it known for paying claims fairly and promptly?
• What discounts are available? (Ask about multiple policy, security system and fire resistance discounts.)
• What's the process for filing and settling a claim? (Ask who to call and what happens after you file a claim.) 
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  Secondary Home

  Be certain that you extend the liability coverage under your homeowners policy to include your secondary home. You should also consider including the secondary home under an excess liability or umbrella policy to provide for additional liability limits.

  Flood Coverage

  Purchase a flood insurance policy to protect your home and covered contents from certain types of flood losses as designated by the National Flood Insurance Program. A flood policy is purchased as a separate policy through the federal program (NFIP) or through a servicing carrier known as a write your own carrier.

  Personal Property / Contents - Property Damage

  Your homeowners insurance policy typically covers personal property, including the contents of your home and other personal items owned by you or family members who live with you. Make sure your homeowners policy includes replacement cost coverage for personal property so that you always receive the full cost to replace whatever item is damaged.

  Fire

  Make sure your homeowners policy contains guaranteed replacement cost coverage. This protects you if the cost to reconstruct your home is higher than your current limit of coverage. Also be sure that your insurance includes rebuilding your home to code. Very often, local ordinances and building codes change over time, which may require additional costs.

  Personal Injury

  Your homeowners insurance policy includes liability coverage for property damage caused by any member in the family, but it may not cover rumors or statements that damage a reputation. You need to add an endorsement to your policy to expand coverage to include liability protection that covers personal injury.

  Umbrella / Excess Liability Coverage

  An umbrella or excess liability policy increases your personal liability limits by adding protection over and above your current auto, boat, or homeowners policies-providing real financial value, as well as priceless peace of mind. Excess liability insurance is available either by an endorsement to your homeowners policy or available as separate coverage.

  Jewelry, Fine Arts, and Collectibles

  Valuable possessions insurance covers personal property that may have unique value, cannot be replaced like regular personal property or is subject to special types of losses such as breakage or mysterious disappearance. For most valuable possession categories, there is no deductible applied at time of loss. Valuable possessions insurance can be added to your homeowners policy or may be written as a separate policy.

  Wine Collection

  If you have a sizable wine collection, you may want to consider scheduling the collection on your homeowners policy. Doing so expands your coverage and eliminates the deductible in case of a loss. You can also consider unique coverages for wine, such as for spoilage.

  Additional Living Expense / Loss of Use

  Ensure that your homeowners insurance policy provides additional living expense or loss of use coverage to compensate you for the additional costs you incur for reasonable housing and living expenses if a covered event makes your house temporarily uninhabitable while it's being repaired or rebuilt.

  Off-Premises Theft

  Most homeowners policies offer an option to include off-premises theft coverage as an endorsement, which covers you for theft of your personal property away from your residence.

  Water Backup

  Water backup coverage can be added to most insurance policies. Consider adding it so that you have the coverage you need in the event of damages caused by a clogged drain, sewer, sump pump, and related risks.

  Personal Liability

  Your homeowners policy includes personal liability coverage to respond to incidents where injuries or damages occur to a third party where you may be deemed negligent. However, you should consider purchasing a personal umbrella or excess liability policy to provide additional coverage limits to protect your assets in case a lawsuit is brought against you.

  Medical Expenses

  Your homeowners policy should include medical expenses coverage to take care of injuries and treatment - generally not of a serious nature. In the event a person is injured on your property and requires medical attention, you would be able to submit the injury-related medical expenses to your insurance carrier. Medical expenses are usually paid without a liability claim being filed against you.

  Miscellaneous Coverage

  You should make sure your homeowners insurance policy covers your trampoline, as many insurance providers refuse to take on trampoline liability and exclude the item from coverage.

  Secondary Home

  Be certain that you extend the liability coverage under your homeowners policy to include your secondary home. You should also consider including the secondary home under an excess liability or umbrella policy to provide for additional liability limits.

  Flood Coverage

  Purchase a flood insurance policy to protect your home and covered contents from certain types of flood losses as designated by the National Flood Insurance Program. A flood policy is purchased as a separate policy through the federal program (NFIP) or through a servicing carrier known as a write your own carrier.

  Personal Property / Contents - Property Damage

  Your homeowners insurance policy typically covers personal property, including the contents of your home and other personal items owned by you or family members who live with you. Make sure your homeowners policy includes replacement cost coverage for personal property so that you always receive the full cost to replace whatever item is damaged.

  Fire

  Make sure your homeowners policy contains guaranteed replacement cost coverage. This protects you if the cost to reconstruct your home is higher than your current limit of coverage. Also be sure that your insurance includes rebuilding your home to code. Very often, local ordinances and building codes change over time, which may require additional costs.

  Personal Injury

  Your homeowners insurance policy includes liability coverage for property damage caused by any member in the family, but it may not cover rumors or statements that damage a reputation. You need to add an endorsement to your policy to expand coverage to include liability protection that covers personal injury.

  Umbrella / Excess Liability Coverage

  An umbrella or excess liability policy increases your personal liability limits by adding protection over and above your current auto, boat, or homeowners policies-providing real financial value, as well as priceless peace of mind. Excess liability insurance is available either by an endorsement to your homeowners policy or available as separate coverage.

  Jewelry, Fine Arts, and Collectibles

  Valuable possessions insurance covers personal property that may have unique value, cannot be replaced like regular personal property or is subject to special types of losses such as breakage or mysterious disappearance. For most valuable possession categories, there is no deductible applied at time of loss. Valuable possessions insurance can be added to your homeowners policy or may be written as a separate policy.

  Wine Collection

  If you have a sizable wine collection, you may want to consider scheduling the collection on your homeowners policy. Doing so expands your coverage and eliminates the deductible in case of a loss. You can also consider unique coverages for wine, such as for spoilage.

  Additional Living Expense / Loss of Use

  Ensure that your homeowners insurance policy provides additional living expense or loss of use coverage to compensate you for the additional costs you incur for reasonable housing and living expenses if a covered event makes your house temporarily uninhabitable while it's being repaired or rebuilt.

  Off-Premises Theft

  Most homeowners policies offer an option to include off-premises theft coverage as an endorsement, which covers you for theft of your personal property away from your residence.

  Water Backup

  Water backup coverage can be added to most insurance policies. Consider adding it so that you have the coverage you need in the event of damages caused by a clogged drain, sewer, sump pump, and related risks.

  Personal Liability

  Your homeowners policy includes personal liability coverage to respond to incidents where injuries or damages occur to a third party where you may be deemed negligent. However, you should consider purchasing a personal umbrella or excess liability policy to provide additional coverage limits to protect your assets in case a lawsuit is brought against you.

  Medical Expenses

  Your homeowners policy should include medical expenses coverage to take care of injuries and treatment - generally not of a serious nature. In the event a person is injured on your property and requires medical attention, you would be able to submit the injury-related medical expenses to your insurance carrier. Medical expenses are usually paid without a liability claim being filed against you.

  Miscellaneous Coverage

  You should make sure your homeowners insurance policy covers your trampoline, as many insurance providers refuse to take on trampoline liability and exclude the item from coverage.

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