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Homeowners Insurance

Purpose of Homeowners Coverage

Your home is likely one of your most valuable assets.

Homeowners insurance helps protect you financially if your home or belongings are damaged by a covered event. It can also provide liability protection if someone is injured on your property or you are responsible for injuring someone else or damaging their property.

Most mortgage lenders require homeowners insurance—but the right coverage does much more than satisfy a loan requirement. It helps protect your home, your finances, and the life you have built.

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Protecting You

A - Dwelling

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Pays for damage to your house and structures attached to your house. This includes damages to fixtures such as plumbing, electrical wiring, heating, and permanently installed cooling systems.
You can choose to insure your dwelling at the *replacement cost” or “actual cash value”.
Replacement cost coverage is recommended.

B - Other Structures

C - Personal Property

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Reimburses you for damage to or theft of your personal property. This covers things like furniture, appliances, electronics, lawn equipment, clothing, etc. It also protects your belongings even when they aren’t on your property.
You can choose to insure your personal property at the *replacement cost” or “actual cash value”.
The benefits typically start at 50 percent of your dwelling coverage limit.

Coverage for some property such as jewelry, furs, antiques, coins, guns, and art may be limited. You can purchase additional coverage to protect these items at higher limits and also protect for misplaced items.

D - Loss of Use

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If you cannot live in your home after a loss, this will provide coverage to pay for replacement living expenses (dwelling rental, hotel, meal prep, additional commuting costs, etc).
Typical coverage for loss of use is 20 percent of the dwelling coverage limit.

Replacement Cost vs. Actual Cash Value (ACV)
Replacement cost is the amount to replace or rebuild your home or repair damages with materials of a similar kind and quality without deducting for depreciation. Often the cost to rebuild a home in accordance with current building codes with new raw materials at current labor rates is significantly higher than the proceeds you would receive if you sell your home.

Actual cash value is the replacement cost of your home minus age and wear and tear. Many times an actual cash value policy does not pay enough to fully return your home to the way it was before an incident.

Recommended: Increased Replacement Cost Endorsement

Can provide up to 25% additional if cost of home is higher due to market conditions. For example, a catastrophic loss from tornado, hurricane where supplies are low and costs may be higher.

Keep a Home Inventory

The free NAIC Home Inventory App (in your app store) can capture images, descriptions, bar codes and serial numbers of your prized possessions. The app organizes information room by room and even creates a back-up file for email sharing.

**At a minimum, walk through your home and take photos of every room and your belongings.

Save the photos securely in the cloud so you can easily access them if you ever need to document your possessions for an insurance claim.

App Store: NAIC Home Inventory

Recommended Benefits

Water Back Up of Sewers or Drains

Water damage is one of the most common and costly types of homeowners claims—but coverage often depends on where the water came from and how the damage occurred.

A homeowners policy may cover sudden and accidental water damage, such as damage caused by a burst pipe, an appliance leak, or a washing machine overflow. However, water or sewage that backs up through a sewer or drain—or water that overflows from a sump pump—may not be covered unless Water and Sewer Backup Coverage is added to your policy.

Water and Sewer Back Up helps pay for covered cleanup, repairs, and damaged belongings following a backup. It does not cover flooding from rising surface water, which generally requires a separate flood insurance policy.

Utility Line Coverage

Utility companies are generally responsible for the main utility lines, but homeowners may be responsible for the service lines that connect those mains to their homes.

Utility Line Coverage helps pay to repair or replace damaged underground service lines—such as water, sewer, electrical, or gas lines—that run from the street to your home and are your responsibility.

Because digging up and repairing these lines can cost thousands of dollars and may not be covered by a standard homeowners policy, this coverage can provide valuable protection for a relatively modest cost.

What Happens if I’m Sued?

E - Medical Payments

Medical equipment on the background of group of health workers in the ICU

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Provides coverage for medical bills for people accidentally injured on your property—regardless of who was at fault.

It may also cover injuries you, a family member, or your pet accidentally cause to someone away from your home.

Coverage is typically intended for smaller injuries. Basic amounts of coverage are usually $1,000 per person. Higher limits may be available for an additional cost.

F - Personal Liability

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Personal Liability protects you, your relatives or your pets in the household if you are sued and found legally responsible for Bodily Injury of Others or Damage to Other’s Property.

You choose the amount of liability protection that is appropriate for your situation. Limits typically starts at $100,000. It’s important to choose limits that fit your situation.

Personal Injury/Libel & Slander

What Happens if my Liability Limits are not enough?

Umbrella Insurance helps cover above your limits

What’s Not Covered?

Common Property Insurance Exclusions

Property insurance policies typically do not cover every type of damage or loss. Common exclusions may include, but are not limited to:

Earthquakes — Separate earthquake coverage may be available for purchase.
Flooding — Flood insurance generally requires a separate policy.
Collapse
Mold, fungus, or wet rot

Normal wear and tear
Mechanical breakdown
Smog
Rust, corrosion, or dry rot
Smoke from agricultural smudging or industrial operations
Pollution, including the discharge, dispersal, seepage, migration, release, or escape of pollutants
Settling, shrinking, bulging, or expansion of the property

Cracking caused by settling or movement, including damage to:
- Foundations and footings
- Walls, floors, roofs, or ceilings
- Bulkheads
- Pavements and patios
Damage caused by birds, rodents, or insects, including nesting or infestation
Animal waste, secretions, or other damage caused by animals owned or kept by an insured

Coverage and exclusions vary by insurance carrier and policy. Review your policy carefully and speak with a licensed insurance professional to understand what is and is not covered.

Should you buy Flood or Earthquake Coverage?

Flood – It is important to be aware that the typical homeowners or renters policy does not cover damages resulting from a flood. Flood damage can happen to you, no matter where your home, apartment, or business is located. You can buy flood insurance even if your property is not located in a Special Flood Hazard Area (SFHA). Mortgage lenders, pursuant to federal law, may require homeowners to purchase flood insurance if the property is located in a high-risk flood zone.

Earthquake – Damage caused by sinkholes or earth movement are typically not covered by homeowners policies unless requested and specifically purchased at an additional cost.