Why Do I need Homeowners Insurance?
Homeowners insurance is a vital type of insurance policy that covers a variety of different areas of risk in regards to a residential property that a person owns. If someone has a mortgage on a home, a Homeowners Insurance policy is required by the lender in order to make sure that the house, the asset that is securing the loan, is covered in the case of a total loss. If there is not a mortgage on the home, there is no requirement to have Homeowners Insurance. However, it is still very important to consider because of the many financial pitfalls that can be avoided by having coverages provided by a Homeowner Insurance policy.
What is covered on a Homeowner’s Insurance Policy?
Dwelling (Coverage A)- The dwelling is providing coverage for the cost of rebuilding and repairing your home in the event of a covered loss. The dwelling is considered the main structure of the home or anything that is attached to the structure. Some examples of things that are considered part of the dwelling are an attached garage, an attached shed, attached cabinets, flooring, plumbing, etc.
Other Structures (Coverage B)- Other structures such as a detached garage or shed are a couple of the types of structures that are covered under this coverage. For most insurance carriers, this coverage is an automatic 10% of the dwelling coverage.
Personal Property (Coverage C)- Your belongings are covered on the Homeowners Insurance policy. There are two types of coverages for your personal property, 1. Actual Cash Value (ACV), which is the depreciated value or market value of your personal property, and 2. Replacement Cost, which replaces your belongings with a like item.
Loss of Use (Coverage D)- Loss of Use provides additional living expenses, meaning any necessary expense that exceeds what you normally spend.
Liability (Coverage E)- Liability provides you coverage for bodily injury and property damage sustained by others for which you or covered residents of your household are legally responsible. This does not cover intentional acts.
Medical Payments (Coverage F)- Medical Payments provide coverage to pay for medical bills for those who get injured while on your property. This does not apply for residents of the property.
BE SURE THAT YOU’RE COVERED: Tips for Homeowners Insurance-
Dwelling– It is important to consider that the dwelling coverage (Coverage A) is concerned with replacement cost of the home if there is a total loss. Many times, an insured is worried that the house cost more or less than the dwelling coverage that is being provided on the policy. Market Value is concerned mostly with location, location, location. If there were a fire, the land and the location do not burn. The insurance carrier is concerned with rebuilding the home. Therefore, only the cost to rebuild the home is important because the desirability of the location and the land lot remains the same. Be careful to have the proper amount of coverage because if there isn’t enough dwelling coverage on the home, you may have to come out of pocket to finish the rebuilding of the home.
Liability- The cost of liability on the Homeowners policy is typically inexpensive. You never know what can happen and the cost increase is negligible to increase the liability up to $500k or more if the insurance carrier offers higher liability limits. We do not ever expect to be sued, but things happen every day to people that they are not expecting. If you are ever sued, you will be glad if you have higher liability limits.
Scheduled Jewelry– Your jewelry is covered if there is a fire, but you have limited coverage in the case of theft. If you have expensive pieces of jewelry that you want to make sure are replaced if they are stolen, we recommend scheduling them onto your home insurance policy. In order to schedule them onto the policy, a recent appraisal that has been completed within the last 3 years is required.
Other Structures- If you have other structures, such as a gazebo a detached garage or a detached casita, make sure that you tell your insurance agent about this structure so that there is enough coverage if there is a loss to this structure.
How do I get a quote for homeowners or renters insurance?
Contact Us here on our site or call The Insurance Team at 480-626-1860 or email us at Info@theinsteam.com and a member of our team will be happy to shop rates with over 20 insurance carriers to find you the most affordable Homeowners policy for the best coverages that fit your individual needs. You can also visit us on Facebook at https://www.facebook.com/InsuranceTeam.
Carriers that The Insurance Team represents for Homeowners Insurance:
Safeco, ASI (American Strategic Insurance), Travelers, Nationwide, Stillwater, Mercury, Kemper, State Auto, First American, Mapfre, American Modern, Statewide, Foremost, The Hartford, Encompass, Homeowners of America, and more.