In the past, replacement coverage was called Guaranteed Replacement Cost. There is no such coverage anymore. Today it is Replacement Cost Coverage, which means each insurance company designates a percentage of additional coverage on top of the insured amount.
You may want to consider insuring your home for more than it is worth, since it would probably cost you more to rebuild it in the future. Talk to your agent about the right amount of coverage for your home.
Do you work from home out of an onsite office? If so, you may need to review your homeowner’s insurance to make sure you have adequate liability coverage and property protection for any equipment you have.
Liability coverage is a part of homeowner's insurance that is often overlooked. This type of coverage protects the insured against claims arising from bodily injury and property damage to others.
There are two different compensation methods available with homeowners insurance. One is a “cash value” which pays for the amount the dwelling was worth at the time – including depreciation. A “replacement value” policy pays the costs for rebuilding with similar quality materials.
Paying attention to your property can help you detect and diagnose damage early on. Consider things like having your air conditioner inspected routinely so that if there’s potential damage, you can claim it and avoid more costly repairs.
Remember that almost anything that's related to wear and tear is not covered by your homeowners insurance. So a roof that gets old and needs to be replaced is not covered, but a hailstorm that damages your home usually will be covered.
Do you work from home on a regular basis? If so, remember that damage to your office equipment typically falls outside the parameters of your home insurance. If you work from your home computer very occasionally to take care of something while home sick, you’re probably in the clear.
It's vital to understand both what is and what is not covered by your homeowners policy. For example, flood damage is not covered. However, the federal government has a National Flood Insurance Program that makes flood insurance available to everyone in the country.
Do you live in a part of the country that has hurricane deductibles? Many insurers have put these in place in the aftermath of the devastating 2005 hurricane season that included Katrina, Rita, and Wilma. If your damage is due to a tropical system or hurricane, you have to pay the deductible – which often between 3 percent and 10 percent of the value of your home.
When a home is in an area that is subject to unpredictable, violent weather events, it is a good idea to make sure your homeowner’s insurance covers them, particularly damage caused by high winds.
Areas that periodically undergo flooding may require flood insurance along with homeowners insurance. An insurance customer can ask their agent what coverage is right for where they live.
We recognize that no one who’s buying a new home wants to consider what will happen if their home becomes so damaged that they can’t live in it, but it’s necessary. Ensuring you choose a policy with loss-of-use coverage could provide the cash you need for a hotel when you need it most.
Property losses as a result of family members who no longer reside in your home are covered by most homeowners' insurance policies. In fact, if you have a child who has left for college and has experienced property damage or loss while living in his or her dorm, he or she is covered under the personal property clause in the contract.
We recognize that many homeowners' insurance policies include a frustrating amount of legalese. If you need help understanding exactly what you’re buying, we’re always happy to explain any sections that need clarification in more detail.
For a homeowner’s policy that provides replacement value for the dwelling, you need to check local market costs for labor and materials when the policy comes up for removal. These costs can sometimes spike unexpectedly, and your policy needs to reflect any changes.
When shopping for insurance of any kind, you’ll hear the term “full coverage.” This is coverage that includes everything legally required for your property. This can vary from state to state, so homes in states with more coverage needs may cost more to insure.
It’s important to remember that not all types of water damage may be covered by your homeowner’s insurance policy. While water damage from a refrigerator line may be covered, water damage from a storm surge often is not.
HO-3 homeowners' insurance is the most common of all the homeowners' insurance policies and for good reason: it is comprehensive. HO-3 offers all of the coverage of HO-1 and HO-2 while going further to protect your home against damages like earthquakes, floods, fires, and water damage from a broken pipe.
Are you worried about how you’ll pay for court costs if someone is hurt on your property and sues you? Check your homeowner’s policy. It may be able to help you pay court expenses.
If you are displaced due to damages to your home, keep a record of extra expenses you incur as a result: medical, baby-sitting, and hotel rooms. Some homeowners' insurance policies will reimburse some of these expenses.
One of the most important things you can do when you own a home is to keep records of all your possessions. If possible, you should include serial numbers, brands, and model numbers in your records.
A rider is an addition to your homeowner's insurance policy that's designed to provide extra protection. For example, a rider can be purchased that will offer coverage for mold damage in your home.
