WHAT DOES A HOMEOWNERS INSURANCE POLICY COVER?
Homeowners insurance typically offers a wide range of coverages to help protect your home. Plus, you’ll often find that these covers help protect more than just the physical structure of your home.
A typical homeowners insurance policy helps cover damage to your belongings and other structures on your property and also offers liability protection to help protect you in certain cases.
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TYPES OF COVERAGE
Generally, homeowners insurance policies include these types of coverage:
Home protection: This coverage typically covers your home and attached structures, such as a deck or attached garage.
Protection of personal assets: From furniture to electronics, this coverage can help pay to replace belongings that have been stolen or damaged by a covered loss.
Protection of other structures: This coverage can help pay to repair or replace structures on your property that are not attached to your home, such as a detached fence, garage or shed, if they are damaged by a covered peril.
Family civil liability protection: Accidents can happen. Liability coverage can help protect you if someone is injured on your property and you are found legally responsible for the damages.
Medical expenses for guests. If a visitor is injured in your home, this coverage can help pay for medical expenses that result.
Additional living or subsistence expenses. This coverage can help pay for temporary cost-of-living or subsistence increases, like hotel bills, if you can’t stay in your home after a fire or other covered loss.
Many insurers offer optional coverages that can help better protect you and your belongings.
For example, you may be able to purchase extended coverage for items like jewelry, watches, and furs that are worth more than your personal property coverage limits.
You may also be able to increase your liability coverage limits by adding a comprehensive personal policy.
Typically, homeowners insurance helps provide protection against various risks, often referred to as “perils”. These may include damage caused by:
- Fire and smoke
- Storms with strong winds
- The weight of snow, sleet, or ice falling objects
- Not all policies are the same, be sure to read yours to find out what risks it may or may not cover.
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LIMITS, PREMIUMS AND DEDUCTIBLES
In addition to understanding the coverages your homeowners insurance policy provides, you may also want to understand your deductibles, premium, and limits.
Your deductible is the amount you’ll pay out of pocket for a covered loss before insurance benefits begin.
The different types of coverage within a policy are generally subject to limits, which are the maximum protection the policy will provide for a covered loss.
You may be able to adjust your coverage limits and deductible to suit your needs.
Generally, the amounts you choose affect the amount of your premium, which is what you pay your insurer on a regular basis to keep your policy in force.
A local agent can help answer questions you may have about your coverages and costs so you can build the policy that’s right for you.
Why do I need an annual review of my Homeowners insurance?
The New Year is a time when many people commit to losing weight and being more organized;
but it’s also a good time to decide to further protect your home and family belongings with an annual review of your insurance from your house
Why is an annual review with your insurance agent so important?
Many homeowners purchase homeowners insurance when they first move in, but may not understand the importance of regular review or reassessing their needs.
This is an oversight that can ultimately lead to a gap in your coverage. For example, you may have insured your home for $200,000 the first time you bought it.
A decade later, your house may be worth $300,000. This is a $100,000 gap in coverage, which could leave you without adequate resources to rebuild your home should damage occur.
Your home renovation or improvement is another reason why you may want to review your insurance.
It can help you to ensure that your home and your belongings remain protected and that your coverage is up to date and according to your current needs.
Everything from new kitchen cabinets to a complete renovation can affect the value of your home and may even help you qualify for additional discounts on your insurance policy.
One way to assess your needs is to conduct a home inventory, a detailed catalog of all your possessions.
There are tools and even home inventory apps, like Digital Locker for mobile phones, that can simplify the process.
TIPS FOR TALKING TO YOUR INSURANCE AGENT
Despite what you might think, a review of your Homeowners insurance does not have to be a time-consuming task.
Just having a conversation or a visit with your agent can help you be well informed about your coverage and confident that it meets your current needs.
Here are some ideas of things to talk about:
Does my policy offer enough coverage to rebuild my house today?
Many homeowners are surprised to learn that their policy is outdated and does not provide enough coverage to rebuild their home. Increases in construction costs (which can vary from year to year);
kitchen or bathroom upgrades, new kitchen appliances, or a basement renovation can affect the cost of repairing or rebuilding your home.
For example, a few tweaks to your kitchen can transform it from “standard” to “custom.”
Since insurance companies replace lost items with those of “the same kind and quality,” it’s important that you calculate the full cost of replacing finishes, appliances
How does a newly finished basement affect my policy? A finished basement can not only increase the cost of rebuilding your home;
it may also require additional coverage to protect items in the event of flood damage with Homeowners insurance.
For example, the optional water coverage will help protect new furniture and carpet in your basement if a sump pump breaks or a drain pipe becomes clogged.
Does my policy offer enough coverage for gardening or outdoor appliances?
Installing a new sprinkler system, a larger storage shed, a new swimming pool or hot tub, or purchasing a patio grill or lawnmower are all changes that may require you to update your home insurance.
Renovating your garden or buying new equipment or lots can be important investments that should motivate you to review your coverage.
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Do I need extended coverage for valuables?
Your policy provides standard coverage for your home and belongings, but this coverage may not be enough for all your valuables and is often overlooked.
For example, you may need additional coverage for wedding rings, valuable golf clubs or other sporting goods, family heirlooms and antiques, musical instruments, or art.
If you have your business at home you should consider expanding your coverage to protect your business.
Do I qualify for discounts?
An annual review of your home insurance can also be an important opportunity to ensure that you are receiving all possible discounts from your policy.
For example, you may qualify for a discount if you have installed a security system, smoke alarm, or hail-resistant roof.
There are additional discounts that may apply if you insure your car and home with Allstate, if you have no claims, or if no one in your family is a smoker.
Like home maintenance, an annual review of your insurance is something that can help you a lot to protect what is perhaps your largest investment.
Your local agent will know the details of coverage in your area and can help you make this New Year’s resolution a reality.