HOMEOWNER'S INSURANCE      Homeowner’s insurance is an invaluable investment for every homeowner. If your homeowner’s insurance policy has been stuck in a drawer, filing cabinet or tucked mindlessly away, it is probably about time to pull it out, shake off the dust and make sure it’s up-to-date. While keeping your homeowner’s insurance updated is a dismal task, it is of utmost importance. Not only is it important to purchase homeowner’s insurance, it is just as important to know what your policy covers. Get Home Inventory Software free from the Insurance Information Institute, and document the contents of your home. Do you need to update your homeowner's insurance, or to get a new policy? We can help you evaluate your coverage and be sure that you have sufficient protection. Give us a call today, and you won't be sorry tomorrow!

This page explains the basic types of coverage that you might find in your homeowner's insurance policy. Do you know what’s in your policy? We will be happy to review your policy with your to help you understand the ways you, your home and your loved ones may or may not be protected. You can request a free homeowner's insurance quote, email us, or give us a call at (440) 984-5005.

Homeowner’s insurance policies contain several different coverage areas. Consider these areas when you review your policy:

RESIDENTIAL COVERAGE

The most obvious coverage is protection against damage to, or destruction of, your residential structure. In other words, if your home is destroyed by a tornado or fire, your insurance company completely replaces or repairs your home. In this section of coverage, the most important reason to keep your homeowner’s insurance policy updated is because, in the event of disaster, you will be reimbursed only the amount for which your home is insured. For example, if you purchased your home and homeowner’s insurance five years ago, it is very likely the value of your home has increased since that time. If you have not updated your insurance policy to your home’s current cost to rebuild, your insurance company can only reimburse you for the price you paid five years ago. So, if you purchased the home for $300,000 and the value has increased to $500,000, you’re losing $200,000 – quite a large sum. It is essential to keep your homeowner’s insurance policy updated to be sure your home is insured for 100 percent of the replacement cost. While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner’s insurance policy may make heavy reading, but it will be even more burdensome if it's out-of-date when a disaster strikes.

DETACHED STRUCTURES

In addition to covering your residence, your homeowner’s insurance also includes compensation for damage to detached structures on your property. Whether you have a detached garage, gazebo or tool shed, your homeowner’s policy should cover those structures in some way. Because each homeowner’s policy is unique, you need to know your policy’s coverage limits. For detached structures, the average homeowner’s policy includes compensation for up to ten percent of your home’s coverage cost. For example, if your house is insured for $300,000, your detached structures are automatically covered for $30,000.

A few exceptions accompany the ten percent coverage. First, if your detached structure is used for some business purposes, your claim could be denied. If you have a structure on your property that you must use for business, you must ask for approval in your homeowner’s policy to permit business use of that structure. Second, if your detached structures cost more than $30,000 to rebuild, you must purchase additional detached structure coverage. So if your garage, gazebo or high-tech tool shed costs $45,000 to rebuild, you will need to purchase $15,000 in additional coverage.

It is essential to know your specific coverage. And, because each homeowner’s policy is different, you need to know what is limited or excluded in your policy.

PERSONAL PROPERTY AND ADDITIONAL LIVING EXPENSES

In addition to covering your home and detached structures, your homeowner’s insurance also includes compensation for theft of, or damage to, your personal property, as well as compensation for additional living expenses.

The average coverage for personal property in the typical homeowner’s insurance policy usually ranges from 50 to 75 percent of the price for which your home is insured, depending on your insurance company. If your house is insured for $300,000, your personal belongings should automatically be covered for between $150,000 (50%) and $225,000 (75%). Again, your policy may be different. This is a very important detail, so be sure to check your policy.

But what about additional living expenses? Let’s say, for example, your house burns down in an electrical fire. You shouldn’t be faced with utility bills, and you won’t have to worry about the water bill or electricity, but you unfortunately won’t be sleeping in the comfort of your own bed or enjoying fresh meals from your kitchen, either. This is where the additional living expense coverage comes in. You will need lodging, clothing, food and other items until your home is rebuilt; you will probably have to rely on a few nights’ stays in your local motel and enjoy restaurant food for awhile, in addition to other expenses. You need to know what your policy’s coverage limit is, as this amount will vary from insurer to insurer.  Some insurance companies will allow unlimited cash flow in this area of coverage, while others will provide coverage for a percentage of your total homeowner’s insurance coverage. Be sure you know what your policy covers.

PERSONAL LIABILITY

Many consider this one of the most important components of a homeowner’s insurance policy because it covers legal circumstances. The personal liability coverage in your homeowner’s insurance protects you from lawsuits stemming from bodily injury or property damage to others while on your property – situations in which you are legally responsible to pay.  

A few examples of where personality liability coverage can be used:

1. Your misguided golf ball breaks someone’s car windshield.

2. A houseguest slips on loose carpet in your living room and sprains her ankle.

3. Giselle, your Spanish Mastiff, bites the neighbor who is visiting your home.

Because these types of damages can really add up, you need to know your liability coverage limit. Keep in mind that you can’t predict where liability law suits will originate. Due to this, it is important that your homeowner’s liability coverage match the rest of your liability coverage. Not sure how much liability coverage you should purchase? Here are several things to consider…

1. What are you worth? (How much money do you have now and how much will you have in the future?)

2. Will you feel morally responsible? (Will you purchase a higher liability limit to be sure that those injured are provided for?)

3. What would you expect if you were the one suing?

With most insurance companies, the difference between $100,000 liability coverage and $1 million liability coverage is no greater than $75 per year. A few more dollars a month could save you thousands of dollars in a personal liability case.

Dinsmoor Insurance Agency   177 Park Avenue   Amherst, OH 44001   (440) 984-5005

© 2007-11  Web Site Design by High Time Design Lorain, OH 44055 - please report site problems here