Most homeowner’s policies contain a variety of coverages Here is a brief explanation of just some of the coverages to help you when considering your choices in purchasing insurance for your home.
Home (Definition: The building structure)
Replacement Cost Most homeowners’ policies will pay to rebuild your home if it was completely destroyed. In addition to the structure, coverage includes the wiring, plumbing, heating and air conditioning. Policies are issued for the amount it would cost to rebuild your home. Your agent can assist you with determining the correct insurance value as land and unattached buildings are not included in this amount. It is important to note that there are claim payment penalties for homes that are greatly under insured.
Coverage Typically losses covered by a homeowner’s policy are for fire, windstorm, hail, lightning, theft or vandalism. Other damage may be covered, but generally these policies do NOT cover flood or earthquakes.
Deductible You can choose from a variety of deductible amounts. A deductible is an amount of money that you pay first for any loss. Many people choose between $1,000 and $2,000, usually the higher your deductible, the lower your premium.
Personal Property (Definition: Contents-Imagine shaking your house upside down, what falls out is considered contents.)
Replacement Cost Covering your contents for replacement cost versus actual cash value is recommended. Like it sounds, replacement cost is what you pay to replace an item; actual cash value is what the item is worth after depreciation. For example: if your sofa is destroyed in a fire, replacement cost on contents coverage would allow the company to reimburse you the cost of a new sofa. Actual cash value coverage limits the company payment to the amount your old sofa was worth if you were to sell it.
Liability (Definition- Cost for damage/injury to others you are legally obligated to pay.)
Liability Homeowners policies include coverage for injury or damage to others when you are sued or determined to be legally liable. Examples include; injury if someone falls on your icy sidewalk, your dog bites a neighbor or damage if your child breaks a friend’s expensive Chinese vase. Consider your assets when deciding on a liability limit, For many people $500,000 adequate, but other limits are available.
Contact us today to help you determine the insurance protection that best fits your needs.