Homeowners Insurance

Homeowners Insurance!

What you need to understand about Homeowners Insurance!

homeowners-insuranceA large per­cent­age of U.S. home­own­ers mis­tak­en­ly believe that stan­dard home­own­ers insur­ance pro­tects them from a wide array of per­ils, accord­ing to new research by the Nation­al Asso­ci­a­tion of Insur­ance Com­mis­sion­ers. The NAIC sur­vey found that 33 per­cent of U.S. heads of house­hold, who own a home and have home­own­ers insur­ance, incor­rect­ly believe food dam­ages would be cov­ered by a stan­dard home­own­ers or prop­er­ty and lia­bil­i­ty pol­i­cy, despite exten­sive media cov­er­age on Hur­ri­cane Kat­ri­na vic­tims whose claims were denied because they lacked flood insur­ance.
The NAIC sur­vey also revealed oth­er home­own­er mis­un­der­stand­ings relat­ing to com­mon loss sit­u­a­tions — none of which are cov­ered by stan­dard home­own­ers insur­ance poli­cies — such as:

  • 68 per­cent think vehi­cles such as cars, boats and motor­cy­cles stolen from or dam­aged on their prop­er­ty are cov­ered.
  • 51 per­cent think dam­ages from a break in the water line on their prop­er­ty sup­ply­ing water to their home are cov­ered.
  • 37 per­cent think dam­ages due to a break in the sew­er line on their prop­er­ty that con­nects to their munic­i­pal sew­er sys­tem are cov­ered.
  • 35 per­cent think dam­ages from earth­quakes are cov­ered.
  • 34 per­cent think dam­ages from mold are cov­ered.
  • 31 per­cent think dam­ages from ter­mites or oth­er infes­ta­tion are cov­ered.
  • 22 per­cent think pets stolen from or injured on their prop­er­ty are cov­ered

The NAIC sur­vey revealed anoth­er type of poten­tial con­sumer mis­un­der­stand­ing. Twen­ty-four per­cent of respon­dents indi­cat­ed their poli­cies insured their homes for the actu­al cash val­ue, while 64 per­cent said their poli­cies cov­ered the replace­ment cost. Anoth­er 12 per­cent said they did not know which type of cov­er­age — actu­al cash val­ue or replace­ment cost — they pur­chased. (Reprint­ed with per­mis­sion from Inde­pen­dent Insur­ance Agents of Wis­con­sin Action News 6/25/07.) This is why we believe you need to under­stand the insur­ance you have bought or are look­ing at buy­ing. Because of this belief we take time to explain the cov­er­age you have and seek to answer any ques­tions you come up with. If we don’t know the answer, we are more than will­ing to find the answer for you.
The more informed you as the insured are, the eas­i­er claim set­tle­ment will go. Please con­tact us with your ques­tions.

When Comparing Homeowners Insurance Policies, What Should I Look At Other Than The Limit On My Real Estate Property?

There are many fea­tures with­in a home­own­ers insur­ance pol­i­cy that will make it dif­fer­ent than anoth­er. In addi­tion to the lim­its shown on the front of your pol­i­cy (dwelling, con­tents, lia­bil­i­ty, etc.), you need to dig into the pol­i­cy lan­guage or con­tact a qual­i­fied Richards Insur­ance Agent to see how your pol­i­cy address­es things like:

Backup of Sewer or Drains

The basic home­own­ers insur­ance pol­i­cy does not cov­er this, but many offer it as an option or enhance­ment.

Wind damage to trees

If you have a tree blown down on your home, most poli­cies will pay for the cost to remove it. How­ev­er, if the tree is just downed in the yard, some poli­cies will cov­er the removal — oth­ers will not.

Cost to Replace your Home

Vir­tu­al­ly all home­own­ers insur­ance poli­cies pro­vide replace­ment cost cov­er­age (not depre­ci­at­ed) up to the home val­ue shown on the pol­i­cy. What if your cost to rebuild exceeds that lim­it? Many com­pa­nies offer endorse­ments to allow some “excess cov­er­age” to allow for sit­u­a­tions where the cost to rebuild exceeds the home val­ue shown. While you should try to insure at the full cost to rebuild, these endorse­ments take the bur­den off of you to make sure that you are aware of every change in build­ing costs over time.

If I Have A Business Office In My Home, Does My Homeowners Insurance Policy Provide the Coverage I Need?

Prob­a­bly not, unless you address a few items specifically.Be sure to address any busi­ness activ­i­ty with your agent. There are many gaps in both the prop­er­ty and lia­bil­i­ty cov­er­age under the home­own­ers insur­ance pol­i­cy, rel­a­tive to the busi­ness. Your pol­i­cy may exclude any detached struc­tures, such as a garage, that are used for busi­ness pur­pos­es, includ­ing stor­age of mate­ri­als. Con­tents cov­er­age for busi­ness per­son­al prop­er­ty is usu­al­ly lim­it­ed to $2500 at home or $250 away from home. Lia­bil­i­ty cov­er­age for busi­ness activ­i­ty is gen­er­al­ly exclud­ed. Many of these items, how­ev­er, can be addressed by many home­own­ers poli­cies as in-home busi­ness­es become more com­mon. Cov­er­age for con­tents, busi­ness com­put­ers and data and lia­bil­i­ty can often be added to the home­own­ers pol­i­cy or be pro­vid­ed by a com­pan­ion pol­i­cy.

Why do I need Renters insurance?

A: Renter’s insur­ance pro­tects all per­son­al prop­er­ty you own while a ten­ant, and will reim­burse you for loss due to fire, rob­bery, bur­glary. Plus, poli­cies also cov­er:

  • Addi­tion­al liv­ing expens­es for motel dur­ing repairs
  • Med­ical pay­ments to oth­ers if injured while in your apart­ment
  • Per­son­al lia­bil­i­ty due to a law­suit not relat­ed to your work or pro­fes­sion

Should I have “Replacement Cost” coverage on my home?

Yes, because there is much bet­ter cov­er­age under your home­own­ers insur­ance pol­i­cy with this endorse­ment. The com­pa­ny must cov­er the full val­ue of the prop­er­ty in case of a loss. Oth­er­wise, the com­pa­ny would pay only the face amount of the pol­i­cy and that amount may be low­er than the cost to rebuild your home due to infla­tion costs.