Insurance for Your Home

What does a homeowners policy cover? What doesn't the policy cover?

Most Policies Cover - Fire and lightning, damage by aircraft & vehicles, vandalism & malicious mischief, theft, explosion, riot & civil commotion, smoke damage, falling objects, windstorm, hurricane and hail, collapse of building, freezing, accidental discharge, leakage or overflow of water or steam.

Additional information on policy coverage:

Other Structures
When a house is covered on a Homeowners Policy, there is automatic coverage that extends to cover fences, drives, walks, yard fixtures, and detached outbuildings. The limit of coverage is 10% of the amount of coverage on the main house and is restricted to the insured premises. Coverage does not apply to outbuildings rented to others, used commercially, or for farming purposes. An additional amount of insurance can be purchased for detached buildings if the value is greater than the 10% extension.

Loss of Use Coverage
On all Homeowners Policies, coverage is included that will pay for the extra cost of having to reside in temporary quarters while your residence is being repaired. There is a requirement that the damage to the residence must have been caused by an insured peril.

Most Policies Do Not Cover:

• Flooding
• Earthquakes
• Termite damage
• Damage by insects, rats and mice
• Freezing pipes while your house is unoccupied (unless you turned off the water or heated the building)
• Losses if your house is vacant for 60 days or more
• Wind or hail damage to trees and shrubs

How much coverage should I have?

You should have enough coverage to avoid a major financial loss if you have a fire or other kind of damage. This means keeping a realistic dollar amount of coverage on your house. It also means making sure your policy provides replacement cost coverage.

Most homeowners policies provide replacement cost coverage for your house, up to your policy's dollar limits. Replacement cost is what you would pay to rebuild or repair your home, based on current construction costs. Replacement cost is different from market value. It does not include the value of your land.

To receive full payment (minus your deductible) for a partial loss, such as a hail-damaged roof, you must insure your house for at least 100 percent of its replacement cost. If you insure your house for less than 100 percent of the full replacement cost, the policy will pay only part of the expense of a partial loss.

What deductible do I need on my homeowners policy?

Deductibles help reduce your cost, but they also limit the amount you may recover in event of loss. When you lower the deductible, you are buying back more coverage, so the premium will be higher.

What about replacement cost coverage for my personal property?

Homeowners policies automatically cover household contents -- furniture, clothes, appliances, etc.. You can get more coverage by paying a slightly higher premium. This automatic coverage pays only the actual cash value of damaged, stolen or destroyed household goods. Actual cash value is an item's replacement cost, minus depreciation.

Replacement cost coverage gives you more protection than actual cash value coverage. The following example tells why: A burglar steals your six-year-old television set. With actual cash value coverage, you get only what you would expect to pay for a six-year-old television set. With replacement cost coverage, the insurance company pays to replace your TV with a new set similar to the stolen one.

What types of extra property coverage might I need?

You might want more coverage for certain items than your policy provides. For an extra premium, you can buy endorsements -- policy add-ons -- covering these items or increasing the coverage you have. Some of the most common endorsements increase coverage for residential glass, jewelry, fine arts, camera equipment, coin or stamp collections, computer equipment and radio and television satellite dishes and antennas:

Increased Limit on Jewelry, Watches and Furs
Policies have a $500 theft limitation on jewelry, watches, and furs, etc. The limit may be increased for additional premium.

What type of liability coverage is included in a homeowners policy?

Personal Liability (Other Than Automobile)
The Personal Liability Coverage provides protection when you become legally obligated to pay damages for bodily injury or damage to someone's property because of your negligence. It will also pay to defend any suit against you even if the allegations are false.

Examples:

• Your dog may bite a neighbor or passer-by.
• You may accidentally injure someone else while hunting or playing golf.
• Someone could be injured in your swimming pool or slip and fall on your property.
• Personal Liability Coverage not only protects you for things happening on your premises but also for your personal activities. This liability coverage does not cover your business activities. The minimum required limit of Personal Liability Coverage is $100,000 but can be increased for a small additional premium.

Personal Medical Payments
This coverage provides for medical bills that result from an accident which occurs on your premises or as a result of your personal activities. Medical Payments Coverage applies regardless of whether you or your family is at fault.

Example: If a neighbor's child fell from a tree at your home and broke her arm, the Medical Payments Coverage will pay the resulting medical expenses.

This coverage does not pay for medical bills incurred by you or members of your household. Minimum Medical Payments Coverage of $1,000 is required on all homeowners policies but may be increased for a small additional premium.

What kind of optional liability coverage is available?

In addition to the liability insurance included in your homeowners policy, you may want to consider some of the following optional endorsements. All these additional liability coverage's would require an additional premium.

Personal Injury Coverage
This endorsement adds coverage for false arrest, libel, slander, defamation of character, invasion of privacy, wrongful eviction, or wrongful entry.

Office, Private School or Studio Occupancies
Since business liability is excluded under the Homeowners Policy, this endorsement is REQUIRED if you have an office, professional, private school, or studio occupancy at your principal residence. This endorsement is also available, optionally if you have this exposure at an additional residence. Coverage is not available under a Homeowners Policy when the business occupancy is not in a residence.

Business Pursuits Liability Coverage
Personal liability and medical payments coverage's can be extended to include limited classes of business pursuits..

Additional Premises Liability Coverage
With this endorsement you can add liability and medical payments coverage's for one- or two-family residential property which you rent to others.

What Discounts can I get on my homeowners insurance?

Companion Auto
If the same insurance company writes your homeowners and automobile coverage you may be eligible for a premium discount on your homeowners policy.

Home Security
You can get a premium discount if your house meets certain minimum security standards for doors and windows.

Burglar Alarms
You can get a premium discount if you have an electronic burglar alarm system that meets certain minimum requirements.

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