FRIDAY, APRIL 12, 2013
How well do you understand your Homeowners Insurance Policy?
So you have taken the first step to protect your home by purchasing Homeowners Insurance. But do you know what you are paying for? In the event of a disaster do you know what’s covered and what is not? Do you know what has limited coverage? Let’s run through some of the basics on a Home Insurance Policy to help better understand what you are purchasing.
Homeowners Insurance DOES NOT protect from flood damage.
Get a Flood quote to see how little it can cost to protect your home.
Coverage starts at 149.00 a year or as little as 12 a month.
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Dwelling coverage provides insurance on the main structure and should be insured for replacement cost not for market value. New Policies are currently written using an replacement cost estimator. This form determines the amount of coverage needed to rebuild your home. If you have an existing older policy your home may be under insured. Prior to 2007 most carriers would allow you to choose the amount of coverage you wanted for your dwelling. Many residents decided to insure the home for the Mortgage amount when they took out their policy. As building cost continues to raise these policies do not provide enough coverage needed to reconstruct the dwelling.
A standard HO3 Homeowners policy provides a limit of 10 percent of the dwelling coverage for other structures on the property. These can included a sheds, barns, detached garages etc. In order to keep cost down some carriers have begun lowering this coverage from 10 percent to 2 or 4 percent. Review you policy and make sure that the limit for other structures is sufficient for your out buildings.
Contents or Personal Property:
This is the coverage we find most clients do not fully understand until there is a claim. No one likes surprises when it comes to whats coverage during a claim. A standard policy will included a limit of 50 percent of the dwelling coverage for personal property. This can be increased or decreased with some insurance companies. You need to make sure that your personal property is insured for replacement cost and not actual cash value. Actual cash value will not be sufficient to replace your belongings in the event of a loss such as a Fire or Theft.
Be aware of the fine print! All homeowner’s policies have predefined limits they will pay for particular items. Most policies have a 250 or 500 dollar limit for firearms. They also limit jewelry coverage to 500 dollars for any one item with a total limit of 2500 dollars for all jewelry. In most cases this is not enough coverage and high value items MUST be scheduled to be covered for replacement cost. Other items with limited coverage include Fine Art, Furs, Cash and Collectibles. Always ask about coverage limits and ALWAYS schedule expensive items on you policy.
Homeowners Policies in Florida default to 100,000 in liability coverage. This coverage is used in the event you are found liable for someone’s injury or damage to their property. For example, a person falls going down the steps leaving your home. You could be found liable if that person is injured because you do not have the proper handrails on the stairs to your home. Most cases we see the policy has the defaulted liability coverage of 100,000. Did you know you can increase that coverage to 300,000 for around 15 dollars? I highly recommend the additional 200,000 in coverage for the 15 dollars. It could help avoid a judgement or liens placed against you in the event of a lawsuit.
Want to find our more information about Home Insurance Policies? Check out our Homeowners Insurance page that breaks down all of the coverage on your policy.
Information about Home Insurance Coverage
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Posted 8:11 AM
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C. Mantahn said...
Thanks for such a great Blog post and awesome information about Home insurance. I never knew flood was not covered!
THURSDAY, MAY 30 2013 7:52 AM
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