Homeowners Insurance
Chances are your home is your single most valuable investment. Homeowners insurance is a "package" policy.
It covers your structures and possessions - property
insurance - and it provides protection against personal liability.
What coverage do I get?
Homeowners insurance usually covers damage to both structures and personal property caused by:
 | Fire or lightning |
| Windstorm or hail |
| Explosions |
| Riot or civil commotion |
| Aircraft |
| Vehicles |
| Smoke |
| Theft or vandalism (sometimes called malicious mischief) |
| Falling objects |
| Weight of ice, snow or sleet |
| Freezing of a plumbing, heating, air conditioning or other such household system |
In fact, your coverage is most likely even more comprehensive than the above
list. Many homeowners policies cover damage by "just about
everything," unless the coverage is specifically excluded. In these cases,
it is even more important to understand what is not covered.
Are there any other exclusions I should know about?
There may be other exclusions spelled out in your policy such as neglect, intentional loss, "earth movement," general power failure and even damage caused by war. If you neglect to take care of your property (e.g., a leaky roof), you may not be covered.
ACV vs Replacement cost basis
The common methods are:
Actual Cash Value - The replacement cost of the item minus depreciation. For example, a new television set may cost $500. If your 7-year-old TV set gets damaged in a fire, it might have depreciated 50 percent. Therefore, you would be paid $250 for that set.
Replacement Coverage - The cost of replacing an item without deducting for depreciation. So today's cost for a TV set with features similar to the 7-year-old one damaged by fire would determine the amount of compensation. If it still costs $500 today, that would be the replacement coverage.
Replacement value should not be confused with market value. The
market value is what your house, for example, would actually sell for and is
generally more than the replacement cost.
Typically, the difference in
premiums is 10 to 15 percent to change from actual cash value coverage to
replacement coverage.
Are their limitations on my personal property?
Remember that homeowners insurance is designed to cover general personal possessions, not valuable collections like antiques, jewelry or original art.
Your policy lists the specific monetary limits for personal property under what is called "Special Limits." Those limits usually are:
| $200 for money, bank notes, gold and silver (other than goldware and silverware), platinum, coins, and medals. |
| $1,000 on securities, accounts, deeds, evidences of debt, letters of credit, notes (other than bank notes), manuscripts, passports, tickets, and stamps. |
| $1,000 on watercraft, including their trailers, furnishings, equipment and outboard motors. |
| $1,000 on trailers not used for watercraft. |
| $1,000 for loss by theft of jewelry, watches, furs, precious and semiprecious stones. |
| $2,000 for loss by theft of firearms. |
| $2,500 for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware and pewterware. |
| $2,500 on property on the resident premises, used for business, and $250 on this property damaged or lost away from the premises. |
If these limits seem low to you you may wish to talk to us about additional coverage
for specific items.
Are my tenants covered by my homeowners policy?
No. Your property and the structure are covered by your
policy as is your personal liability. However, the tenants' possessions and
liability are not covered by your policy.
I run business out of my home. Am I covered?
Yes, but within certain limits. Both are covered as personal property used for business purposes. However, like all personal property, there are monetary limits on reimbursement. Whether your home business is your primary occupation or a hobby that nets you a few hundred dollars a year, it is still a business and you should treat it as such.
Also, keep in mind that the personal liability protection in your homeowners policy does not extend to business liability.
How can I lower my premiums?
There are things you can do to lower your premium. Installing deadbolt locks (to discourage theft), fire extinguishers, smoke alarms, and burglar and fire alarms that alert your local police and fire stations can often save you up to 15 percent on your premium. Check with us before purchasing any of these items to see if your insurance company has specific requirements to qualify for the discount.
Many of our insurers offer discounts if you insure both your home and automobile with the same company.
Another way to save may be to increase the deductible on your homeowners policy.
What if I am sued or found liable for injury to another person?
Liability covers bodily injury and property damage to others due to your negligence. The coverage applies to non-auto accidents that occur either at your residence or off the premises.