Homeowners Insurance Unveiled Part 1

As a homeowner, this type of insurance is the silver lining to your monthly mortgage payments.  Buying a home is by far the biggest purchase most people will make in their life time.  With that said, you want to make sure your home is properly insured with adequate insurance coverage.  


I know, I know… insurance is never fun to read about but if and when there comes a time when you need it, you want to be prepared.  For example, did you know if your iPad is stolen it may be covered under your renters or homeowners' policy? Ah ha… see you are learning something, keep reading. 


I do not want to overwhelm you in one post, so to make it an easy read I will break up this stimulating topic into two posts.  This first post will cover homeowners' coverage A-C and the follow up post will cover homeowners' coverage D-F.  

Below are standard examples of each type of coverage. 


Coverage A: Structure of your home 


Covers damage done to the structure of your home due to a hurricane, hail, lightening or fire.  These events are called “covered perils”.  Note that flood and earthquake coverage is excluded from standard homeowners' insurance policies. 


It is recommended to purchase enough insurance to cover the cost of rebuilding your home.  Keep in mind that this amount is not the market value of your home nor does it include the value of the land you home is built on.  This amount is solely the cost of building your home from the ground up.  


For example: If it cost $300,000 to rebuild your home but the face amount of your policy is $250,000 – you are under-insured.  How will you know if you are under-insured? Call and talk with your insurance provider.
  
Coverage B: Other structures 


This coverage insures the structures not attached to your home such as a shed or fencing.  Typically the insured amount is 10% of the face amount in coverage A.  In this example, the coverage amount will be up to $25,000.    


Coverage C: Personal Property 


This coverage insures your personal property that is stolen or damaged due to a covered peril such as a fire, hurricane, etc.  This includes household content (furniture, clothing, electronics, etc.).  The amounts for this type of coverage greatly varies.  If you have items such as engagement rings, wedding bands, or expensive electronics in your home you may want to consider purchasing an additional policy also known as a “scheduled endorsement”. Why? Well because your standard policy may only cover up to $2,000 for stolen jewelry.  Therefore, if you own a necklace that is valued at $5,000 your insurance may not completely cover this lost.   


The best housewarming gift you can give yourself and your family is a home inventory checklist.  (Owning a home is great, isn’t it? Don’t answer that! Haha.) 


Click this link to retrieve HOME INVENTORY CHECKLIST (Thank you, State Farm).  If you do not want to write down everything you own you may want to consider creating a home video of each room in your house.  This checklist or video should be kept outside of your home just in case of a total loss to your home.  


I think this is enough insurance talk for now.  Part two will soon follow and will cover homeowners' coverage D-F. 


Have you filed a claim for coverage A, B, or C due to a covered loss?  




Rianka D.