Because everyone's needs are not the same, it is best to consult your agent to help assess your needs and find the insurance policy that is right for you.
What is Homeowners insurance?
Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it.
Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets.
Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.
Why do you need homeowners insurance?
It is really all about protecting yourself financially if something unexpected happens to your home or possessions. That's important because chances are your home is likely one of your largest investments.
- If your home was destroyed by fire or damaged by a natural disaster, you'd need money to repair or replace it.
- If a guest in your home is injured, liability protection and medical coverage help pay expenses.
- If you are a victim of theft and vandalism, it can reimburse you for your loss or pay for repairs.
- If you are still paying for your home, your lender will require insurance.
It is important to know that homeowners insurance is meant to cover unexpected damage, not routine maintenance. Ask your agent to talk about what is covered and be sure to read your policy so you know exactly what's included and what is not.
Things to consider and questions to ask your agent
Here are few things to discuss with your agent that will influence your decisions.
- How much will it cost to rebuild my house and replace my belongings if they are damaged or destroyed? (Ask your agent to talk you through your home's features and the things you own so you can make an informed decision about coverage.)
- Does the insurance company have a good reputation for customer service? Is it known for paying claims fairly and promptly?
- What discounts are available? (Ask about multiple policy, security system and fire resistance discounts.)
- What's the process for filing and settling a claim? (Ask who to call and what happens after you file a claim.)
Condo Insurance
A basic condo insurance policy will cover damages to most of your personal belongings, as well as walls, floors, ceiling coverings, etc. Most condominium by-laws or trust agreements state that the condo owner owns or is responsible for everything within the unit, including permanently attached fixtures and improvements.
With condo insurance, sometimes called an HO6 policy, damage to improvements, additions and alterations of your unit are covered. Your condo insurance policy also covers your belongings and the structural parts of the building that you own.
Rental-Investment Property Insurance
Helpful questions and guidelines to consider before you complete the form:
- How much dwelling coverage do I need?
Dwelling coverage should be enough to cover the cost to rebuild your home. Not the current market value of your home. The following table can assist you in determining the approximate replacement value of your home:
Formula: (Sq.ft of home) x (Construction cost per sq.ft.) = Dwelling Amt.
| Cost Factors for homes: |
| over 3000 sq.ft. | use
$185.00 per foot |
| 1501 to 3000 sq.ft. | use
$175.00 per foot |
| 1000 to 1501 sq.ft. | use
$165.00 per foot |
| 0 to 1000 sq.ft. | use
$150.00 per foot |
Also, if a real estate appraisal has been done within the last three years , the cost to replace your home can be found in the Valuation Section of the report.
- How much liability coverage do I need?
Liability coverage protects you from claims and lawsuits brought against you for damage of bodily injury and property damage caused by an occurrence where coverage applies. Deciding upon the level of coverage depends upon your individual needs and certain factors including the value of your assets and the amount of coverage you can afford. Approximate cost is $10 per year per 100,000 increase in coverage. We always recommend a minimum coverage that matches current and future assets and income.
- Building Code Upgrade Coverage
Includes coverage for additional costs of repairing or replacing damaged dwelling with any new building codes or zoning laws required by government agencies. The cost usually runs about 10% of the annual premium of the policy.