I have recently added a small addition to my home. How does this impact my home insurance policy?
Whenever you are planning significant upgrades or remodeling to your house, you should reach out to your insurance agent to update your policy accordingly. Something as simple as painting wouldn’t qualify but adding a room or installing new kitchen cabinets would add value to your home. You want to ensure that your policy accurately reflects your home’s worth, allowing for the most comprehensive coverage.
Is my property covered while I’m on vacation or away from my home?
Yes, of course. Your policy applies to your home even when you and your family are out. No matter if you are down the street or on a European tour, your property is covered under your homeowners insurance worldwide.
Do I need to buy additional coverage for certain high-value items, such as jewelry?
The answer to this one depends on your policy. Homeowners insurance typically has limitations when it comes to the liability for certain types of personal property. If you have any questions about a specific type of valuables such as jewelry, furs, cash, silverware or firearms contact your insurance agent to determine your policy’s limits and, if necessary, to buy additional coverage.
Why is my home insured for more than its market value?
In some instances, your coverage will exceed the market value of your home, especially if you have replacement cost coverage applied to your policy. Rather than adhering simply to the current purchase price of your home (i.e., its market value), this amount reflects the cost necessary to rebuild your home in the event of a total loss. If you’re unsure of which is stated in your policy or want to change it, contact your agent to do so.
Does my homeowners insurance policy cover damage from earthquakes?
The basic homeowners insurance policy doesn’t have protection for damage from earthquakes included in your coverage. However, if you deem it necessary, you may purchase an endorsement that guards against earthquake damage. Depending on where you live, such a provision would certainly be a wise move. Just be aware that a separate deductible may apply when you update your policy.
I don’t live in a flood zone. Do I still need flood insurance?
Like earthquake coverage, flood insurance is not included in a basic homeowners insurance policy, and if you aren’t in a flood zone, you should be able to protect yourself from common occurrences like storms and flash flooding. But if you did live in an area for which flooding is a serious risk, you should consider purchasing flood insurance, though you would have to acquire a separate policy.
What’s the difference between replacement cost and actual cash value?
In this case, the amount you receive if you experience a loss will greatly depend on whether your policy is tied to replacement cost or actual cash value. If you have actual cash value applied, you will be entitled only to the depreciated value of the damaged item(s). With replacement cost, however, you would receive the paid replacement value (i.e., the amount it costs to replace the items in question).
Why should I buy homeowners insurance?
- Home Owners: Protect both your house and personal property.
- Tenants of Rental Properties: Protect your personal property.
- All parties: Protection against liability for accidents that injure other people or damage their property.
Are deductibles required and if so, what are they?
Yes, most homeowners forms contain deductible provisions applicable to losses occurring under Section I (Section I losses include (a) dwelling, (b) appurtenant structure, (c) unscheduled personal property, and (d) additional living expenses). The type and amount of deductible varies by company. Deductible provisions do not apply to Section II losses (Section II losses include personal liability [bodily injury and property damage] and medical payments to others). Some companies offer an optional deductible applicable only to wind or hail losses. Most offer higher deductible options such as $500 or $1,000 at a reduced premium.
What property and perils are excluded from most homeowner policies?
Most homeowner policies provide coverage that does not apply to animals, birds, fish, automobiles and business property; for loss or damage caused by flood, surface water, water which backs up through sewers or drains, earth movement, nuclear damage, war, etc. Section II coverages (personal liability and medical payments) do not apply to the operation, ownership, use, etc., of any aircraft, automobile, recreational motor vehicle, water craft powered by more than 50 horsepower motor; bodily injury or physical damage caused by an intentional act of the insured. It must be noted that these are a mere sample of property and perils not covered. A complete review of your policy is the only way to determine what property is covered and what perils are insured against. Also, there are specific limits of coverage on property insured under the homeowner’s policy such as money, securities, water craft, theft of jewelry, silverware, and/or guns.
My house was completely destroyed by fire. I'm trying to collect on my personal property that I had in the house, but the insurance company is telling me I need an inventory. Can they do that?
Yes. Whether your policy pays for the replacement or just the actual cash value, the company is only obligated to pay for personal property that you can show you owned at the time of loss. It is a very good idea to keep an up to date inventory in a secure place. Also, to help you remember what you had, it is helpful to take pictures of each room and keep them with your inventory.
Our sump pump failed and the insurance company is denying our claim because the water backed up through our sewers. Can they do this?
Most insurance policies exclude water damage from water that backs up through sewers or drains. You may wish to contact your agent and inquire about putting an endorsement on your policy, which would cover sewer back up.