“How much home insurance should I buy?” It’s a common question. There’s several different ways to look at this.

If you want to insure for what is known as “replacement coverage,” you need to keep in mind several different things. The biggest thing is: “how much is it going to cost me to rebuild this home or this building if there’s a total loss?” Your insurance agent can help you determine that: what’s known as cost estimates for construction. What we take into account is square footage, features of the home, site locations, and there’s a couple other items that we take into account, but those are the largest ones. What you want to do is you want to work with your agent, give them as much information about the home as possible so they can come up with an idea of what it cost to rebuild this home if there’s a total loss, fire, tornado, whatever.

There’s some other ways to go about it, too. If you go with a policy known as “actual cash value,” you’re basically insuring for what the building’s actually worth and claims will be paid on a depreciated value. That is a less preferred way than replacement. Replacement is always the way to go if you can get that coverage. It’s a little bit more expensive usually, but it’s usually worth it, because there’s no depreciation involved when the claim time comes.

A common people mistake make when they’re insuring their home is they think the assessed value or what they purchased the home for. Those are completely different things. With the insurance, we’re concerned about what it cost to rebuild the home. The assessed value is basically a fair market value. What you purchased the home. It was the purchase price. Those are different things than what the reconstruction costs are and that’s what you want to go off of. A good agent should be able to help you develop the cost of what it would cost to rebuild that home if there’s a total loss.

If you have any questions about how much insurance you need for your home, certainly you can feel free to call us here at Philleo Agency.

There are several different ways to insure items, whether it be buildings, your personal property, business property. Two of the most common ways are replacement coverage or actual cash value. I’m going to help you decide which one is right for you, and I’ll give you a little information on both.

Let’s start with actual cash value. Actual cash value is a depreciated value. It’s what the item is worth today. A good example would be most auto policies are settled on an actual cash value basis. Let’s say you buy a car for $30,000 and three years later it’s totaled up in an accident. Well, that car might only be worth $15,000 at that time. So they pay you the value of what it’s actually worth at the time of the loss. That would be an actual cash value settlement. It’s the value of the vehicle minus the depreciation or value of any item minus depreciation.

Replacement coverage is a little different. Replacement coverage is the preferred method of insuring buildings and business property and personal property. Most auto polices and boats and motorcycles are all set on an actual cash policy. Real estate and other policies are settled on replacement if possible. The way replacement works is you buy an item, and we give you the value of not what it’s worth when you bought it, not what it’s worth at the time of the loss, but what it costs to replace that item for you.

Whether it be rebuilding a home or whether it be replacing some personal property. So if you bought a TV and it was ten years old and maybe it was worth 50 bucks if you sold it, but to replace it maybe cost you $800, we’re going to give you the value for replacing the item if you have what’s known as replacement coverage on your property. It’s usually the preferred method to insure some item. Some items have to be settled on an actual cash value basis. Talk to your agent. They’ll help you decide which coverage is right for you, whether it be replacement or actual cash value, because there are some price differences and there are some requirements to meet for each coverage.

How do I get homeowners insurance? How do I go about doing that? What do I need to provide to the agent and how do they get a quote and set up coverage for me?

That is a very common question. If you need homeowner’s insurance, you are buying your first home or your first condominium and you are not sure how to go about doing it, here are a few tips for you.

Call an agent. We don’t recommend trying to get insurance online or through an 800 number. With homeowner’s insurance that system has not been perfected yet. Using an agent who is going to act in your best interest is going to be your best bet.

So call an agent. We recommend using an independent agent. They can shop around for you and try to find the best coverages and the best rates. They represent more than carrier rather than just calling a company who just represents that one company.

When you talk to your agent they are going to ask you some features about the home. Be prepared to have the approximate year built, the square footage of the home. Of course you are going to need the address. And they are going to ask you a couple features about the home.

One of the things that they are looking for is the age of the electrical system, the age of the heating system, the roof. So you might want to have an idea how old these things are and what kind of condition they are in, because that will affect which carriers you can go to for insurance and how much you pay.

The other thing is too when you are setting this up, they are going to ask you a couple questions about the features of the home, like is there a pool? Is there a fence around that pool? Is there a diving board? Is there a slide? Those are some of the things you need to know. If you answer yes to some of those, you may end up paying more.

What area is the home located in? Is it in an area where there are fire hydrants and a fire department close by or is it in a rural area? Some of those things will certainly affect what you pay.

How old is the house? That will affect how much you pay as well. If it is a newer home, you will generally pay less than if it is an older home. Newer homes have different construction methods and better fire protection, and that is generally the reason why.

So there are a few factors that are going to go into it. But you need to have this information ready ahead of time when you talk to your agent.

And then if you find a company, a carrier, and a price you are comfortable with, that agent should be able to take care of all the paperwork with your mortgage company if you are financing the home and get all the paperwork to them so you can have a smooth closing.

I am Ron Philio with Philio Agency Insurance and thanks for watching videoinsuranceagency.com.

Hello and welcome to Coverage Concepts. I’m Ron Philleo with Philleo Agency Insurance. One of the calls we get frequently is, “I’m buying a new house or a condominium and my mortgage guy said I have to have homeowner’s insurance or hazard insurance. Can you help me with that?” Well let me explain what homeowner’s insurance does. When you purchase a new home or a condominium or an existing home, you want to make sure you have homeowner’s insurance. This is going to protect you in case the home is damaged due to an instance, say, of wind damage, tornado, or fire, or something along those lines. So we want to protect the structure itself.

We also have some other coverages that go along with the homeowner’s policy to cover all your contents inside the home, things like furniture, clothing, and anything else that goes inside your home.

We also cover loss of use of a home. So if there’s a fire and you have to live somewhere else temporarily, we will pay for additional living expenses for you. And liability, which is very important, comes with a homeowner’s policy as well, which covers you in case somebody were to slip and fall on your property and get injured and you get named in a lawsuit.

All those coverages come along with a homeowner’s policy. There are some more specialized coverages you can add on for jewelries and collectibles and guns. So there are options with the policies as well.

Make sure that you use an independent agent that will be able to shop around for you and select coverages. They should be able to educate you on what the policy does and help you select the coverages, and be able to shop around and make sure you are getting the best price in your homeowner’s policy too.

It’s also a good idea to group your auto and home policy together because you get some additional discounts.

I’m Ron Philleo with Coverage Concepts. Thanks for watching. Be sure to check out our other videos.

We get this question quite often in our office. What is flood insurance or do I need it? Well, there’s a couple of different things with flood insurance. People make mistakes sometimes about flood insurance and sewer backup insurance. Today I’m going to define those for you, show you the difference, and then you can have an intelligence with your agent on weather you need to have that coverage or not.

Let’s start off with defining flood and backup with drains and sewers. Flood insurance covers when water comes in it’s considered surface water weather its through doors or windows. Water that was on the surface and is now in your home. That’s what a flood is. You may need that if you live on a flood plane or if your area is prone to surface water flooding. If you’re on a lake or river, you may strongly consider that coverage.

Sewer backup, or sump pump failure coverage, is very very common. You can purchase that right underneath your homeowner’s policy and it’s generally a lot less expensive than flood coverage.

Let’s talk about that then. So, if you live in a flood zone, you’re going to want to look into flood insurance. You can find out if you live in a flood zone by calling your community and talking with the city hall [inaudible]. If you live in a flood zone, they have flood determination maps. You’ll need to know the zone you’re in in order to get a quote. You go about getting a quote through – we recommend using an independent agency, they have access to The National Flood Insurance Program and they’ll be able to get you a quote. Flood prices are going to be based on how close you are to the flooding areas, how often it floods, how much your home is worth, if you want to insure contents, do you have a basement? All of these things are going to factor into it. You need a good agent that’s familiar with the flood program that can work with you and get you a rate. But, if you live in an area prone to that or you’re not sure, definitely call your agent and look into it.

More commonly, sewer backup or sub pump failure. That coverage can get added right onto your homeowner’s policy. It’s just an endorsement added on there and it covers damage from water backing up through a drain in your basement or sub pump failure. This is used quite often. It’s one of the most common claims we see. I highly recommend you look into that. It’ generally considered fairly inexpensive. It’s usually under $100 for most people and it covers water damages weather it be items that are stored down there, weather it be finished products like carpet, or cabinetry, or drywall. It also covers any mechanicals down there if you have a hot water heater or a furnace. Those are all things that sewer backup will cover if you have one of those losses and you have damage due to that.

How much coverage do you need? Well, it depends on what your loss is. Generally, in the lowest slope in your home, if it finished you’re going to want more coverage than if it not finished. Keep an idea of inventory of what you have stored down there. Work with your agent. Again, we will encourage you to work with your independent agent to determine if you need these coverages.

Should you file a claim? Well, if you have a little damage you may not want to file a claim for something small. If it’s a big disaster, yeah, you’re going to need to get a claim going and your agent can help you do that.