Homeowners Insurance

If you have tangible assets, you need the protection of a homeowners policy. These policies cover you in a home or an apartment, whether you are an owner or a renter. A well-written homeowners policy will pay to replace any of your personal property that is destroyed in a fire or other disaster. The policy will also be your first line of defense against a lawsuit from someone injured at your home.

The cost of this coverage is determined by many rating factors. The quality of the coverage, however, is determined by the quality of the insurer and whether the policy is written on a named perils or all-risk basis. A named-perils policy covers only those losses specifically cited in the contract. The all-risk policy works the opposite way — unless a peril is specifically excluded, coverage is provided. The all-risk policy is broader and the burden of proof is on the carrier, not you, in the event of a loss.

Frequently Asked Questions

What kind of records are needed to substantiate a homeowner claim?

It is recommend that you keep a booklet detailing the items or a videotape of your personal property. Having a complete inventory record at the time of loss could save you thousands of dollars because no one remembers everything, and unless written down, lost items will go unclaimed. The booklet should be kept in a safe place, preferably not at home. Keep it in a safe deposit box or with your insurance agent. It is also a good idea to retain all bills for major purchases and additions to the structure of your home. These could serve as proof of purchase in the event of a claim and should also be kept in a safe place. Finally, take pictures of or videotape all these items. Lay china and silverware on a table so that the picture will show the number of pieces and other details such as the design. Keep the pictures and all receipts in a safe place.

How can I lower my homeowners insurance premium?

Insurers frequently award lower rates to homeowners who guard against theft, accidents and other losses. Companies may provide discounts to insured who have multiple policies with the same insurance company. An example would be having your home owners and automobile insurance with the same company.

Here are some things you can do that generally qualify for lower premiums:

  • Secure your home with dead bolts and window locks
  • Install a security system with outside signal and connection to local police
  • Install and maintain smoke detectors
  • Install a sprinkler system for fire
  • Install a fire alarm that automatically alerts the local fire department
  • Stop smoking
  • Keep walks and entrance ways clear of snow and ice
  • Purchase your automobile and home insurance from the same company

Tips for dealing with a flood disaster

Did you know…

  • Floods and flash floods are the most common natural disaster, occurring in all 50 states.
  • Floods cause devastating damage to buildings and personal belongings.
  • One in three flood insurance claims are generated outside areas considered “flood-prone.”
  • Homeowners insurance does not cover flood damage.

Before a flood:

  • Make a written, photographic and/or videotaped inventory of household possessions and property, and store it in a safe place (e.g., a relative’s home or safe deposit box) with insurance policies, documents and other valuables.
  • Take a first aid class from your local American Red Cross chapter.
  • Assemble a disaster supplies kit that includes a first aid kit, canned food, non-electric can opener; bottled water (emergency managers recommend 3 gallons per person), rubber boots, rubber gloves, battery-powered radio, flashlight and extra batteries.
  • Identify evacuation locations.

During a flood:

  • When a warning is issued, listen to local radio and TV stations for information.
  • When a watch is issued, move furniture and valuables to higher floors of your home.
  • Abandon your car if stalled in rapidly rising waters and climb to higher ground.  Do not drive into any large puddles or into water that seems to be moving rapidly.

After a flood:

  • Call your insurance agent as soon as possible to see if you need to file a claim.
  • Make temporary repairs to prevent further damage.  Keep all receipts.
  • Delay permanent repairs until your insurer approves reimbursement.
  • Get any necessary construction permits from your community.
  • Prepare an inventory of all damaged or destroyed personal property. Take photos of damaged areas.
  • Save remnants of damaged or destroyed property for your insurance company adjuster.
  • Meet with your adjuster before signing anything with contractors, lawyers or public adjuster.
  • Let your car dry out before trying to start it.

Protecting yourself is easy!

Flood insurance picks up where your homeowners insurance leaves off. It is not expensive, especially when compared with the monthly payments for disaster loans, and it’s easy to get – just call your insurance agent.

What to ask your insurance agent?

  • Do I have flood insurance?
  • How much flood insurance should I purchase?
  • How much contents coverage should I purchase?
  • Should I consider a three-year policy to reduce my premiums?
  • Do I qualify for a preferred risk policy?
  • Can I finance my premiums?

Tips for taking a home inventory

No one plans to lose their valuables and other belongings in a burglary, a fire or a natural disaster. If one of these unfortunate events destroyed your home, would you be able to report exactly what you lost to the police, to the Internal Revenue Service or to your independent insurance agent?

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Write down any valuable items with their serial numbers (usually found on the bottom or back of major appliances) along with the method of acquisition (purchased, inherited or received as a gift), date purchased and price or approximate value. Attach receipts, if possible.

Remember to include furniture, appliances, carpeting, jewelry, artwork, toys and the contents of your closets, cabinets and drawers. Contact your independent insurance agent with questions or concerns.

Play It Safe With A Videotape

Videotaping each room of your house can make taking inventories easier. Photographs and a tape recorder can substitute for a video camera.

A complete video inventory should contain verbal descriptions of major assets as well as their value. Remember your garage, attic, basement and the exterior of the house, plus your landscaping and fencing. If possible, make it a family project by having everyone take turns describing the objects in your home.

Store the video or photographs along with this inventory in a safe-deposit box and send a copy to a friend or relative.

Don’t Forget Important Documents

Extremely important documents should be photocopied. Keep one copy in your home and the original, where possible, in a safe-deposit box. Important items include, but are not limited to, the following:

  • House – Escrow, title, deed, insurance policy.
  • Personal – Birth certificates, medical history, passports, insurance certificates, credit card numbers, will.
  • Automobile – Certificates of ownership, finance contracts, registrations, insurance policy, driver’s licenses.
  • Finance – Account numbers for checking and savings accounts, CDs, stocks, bonds, other significant investments.
  • Tax – Copies of the first two pages of your state and federal returns for the past five years. Complete returns with appropriate receipts and canceled checks should be kept in a separate file box.

A Final Note

Most policies limit the amount of reimbursement for theft of valuable items, such as jewelry, furs, silverware and guns. If you have some particularly valuable items in these categories, you may need to purchase additional coverage called a “floater.” These types of policies cover each item individually and are usually quite inexpensive.

This information will only be beneficial if you make use of it now. By inventorying your personal possessions ahead of time, you will save yourself from frustration should disaster strike. Your independent insurance agent can help you determine whether your property is adequately protected.

What is covered under a homeowners policy?

The following coverage definitions should help you understand your homeowners insurance policy–but be sure to consult your insurance company representative to assure that you have the right coverage for your needs.

Dwelling Coverage

The dollar amount carried to cover your home and any structures attached directly to it. Ideally, the amount of coverage you carry should equal the cost of rebuilding your home after a total loss.

Other Structures Coverage

Covers other structures set apart from the dwelling on the residence premises, such as a detached garage. This coverage applies up to the limits provided in your policy and can be increased if necessary.

Personal Property Coverage

This coverage provides worldwide coverage for personal property owned or used by the insured.

Loss of Use

This coverage is available when you cannot live in your home due to a covered loss. It pays living expenses, which go over and above your normal living expenses up to the limit provided in your policy.

Liability Coverage

Liability coverage protects you in two ways. First, it provides for your legal defense against a liability claim–whether the claim is legitimate or not. Second, it will pay any court judgments against you up to the policy limit.

Medical Payments

This pays emergency medical bills for anyone injured on your property or any injury caused by a member of your family or a pet, regardless of where it happens. All bills are paid, up to your policy limit, whether or not you’re legally responsible.

Homeowners policies have many other optional features available to you depending on your individual needs. These include earthquake and scheduled personal property coverage.

Do I really need insurance for my home?

Insurance is your protection against the uncertainties of day-to-day living. For most people, their home is their single most valuable possession and their biggest investment.

If you were to suddenly lose your home due to fire or a tornado or have the contents damaged or stolen, like most of us, you probably could not afford to replace everything all at once. And if somebody sued you for an injury or damage caused by you or your property, the cost of defending that suit could run into thousands of dollars in legal fees regardless of the outcome of the suit.

All of these situations are covered by the homeowners insurance policy. While it may be unpleasant to think about fire, theft, and other uncertainties of life, let’s face it, they are there and things happen.

Yet another reason you need to carry homeowners insurance is that mortgage lenders require it. No mortgage company will lend the large amounts of money needed to finance homes at today’s prices without requiring an insurance policy to protect that investment.

What additional coverages are available for a homeowners policy?

Additional Living Expenses and Rental Value

When a disaster forces you to live somewhere else while your home is repaired or rebuilt, this coverage pays for your additional living expenses. It also pays for lost income from any area of your home that you regularly rent.

Personal and Legal Liability

If someone is accidentally injured or dies on or off your property, and it is caused by you, a family member or pet, this coverage pays claims against you for legal responsibility. (Does not include automobile or business liability.)

Medical Payments

Your policy will cover actual medical expenses for accidental injury to others (except your household residents) caused by you, family members or your pets — on your premises or elsewhere – regardless of legal liability.

Protection from Household Accidents

You are also covered for:

  • Damage to interior walls caused by rain and snow
  • Scorched countertops, floors and carpets
  • Ink stains or paint spills on floors, walls and carpets

Full Replacement Cost of Your Dwelling

Offered in most states for one dollar, this feature provides the extra coverage you may need to pay the actual cost to replace your home, regardless of its original cost or your policy limits. In some states, this feature costs an additional $5.

Full Replacement Cost of Contents

Pays to replace your damaged or stolen household contents at today’s retail prices, regardless of their original cost (up to your policy limits).

Extended Personal Property Coverage

To increase your protection and save you money, we’ve combined – into one package — coverage for jewelry, watches, furs, silverware, credit cards and more — at a fraction of the cost of separate coverages. Special extensions of coverage also expands personal liability protection to lawsuits for libel, slander, wrongful entry, and more.

Valuable Items, Watercraft and Trailers

Special limits are available to cover financial loss of property, such as boats and trailers, jewelry, watches, silver and goldware, furs and guns.

Flood Damage

Although flood damage is not included in any standard homeowners policy, your insurance agent can offer you special flood insurance through one of our highly rated companies.