Homeowner's Insurance 101 

Not all homeowners have the same insurance needs. Great Lakes Insurance Services LLC feels it is important that you understand the different types of coverage homeowners insurance policies include, as well as, the many types of optional coverage you can purchase.  If you desire a second opinion about these explanations and recommendations, we can refer you to independent third parties. 

Types of Coverage Included: 

Dwelling:  provides property coverage that protects your house and attached structures if damaged by certain events; including fire, wind damage (i.e.: hurricane, tornado) and weight of ice, snow or hail. You should always carry an amount of insurance equal to a minimum of 80% of the full replacement cost of the dwelling. Replacement cost is the amount it would take to replace or rebuild your home or repair damages with materials of similar kind and quality, without deducting for depreciation. 

Other Structures:  provides protection to other structures at your premises that are not attached to the dwelling. Items covered include detached garages, tool sheds, etc. Coverage is normally limited to either 10% or 20% of the Dwelling limit. However, you may purchase more coverage for an additional premium. 

Personal Property:  provides protection for the contents of your home and other personal belongings owned by you or family members who live with you. Coverage is limited on certain types of property that are especially susceptible to loss, such as cash, securities, jewelry, furs and guns. 

Loss of Use:  this coverage will help with additional living expenses if your home is damaged by a peril insured against to the extent that you cannot live in your home. These expenses include, but are not limited to, housing, meals and warehouse storage. 

Personal Liability:  this section of the homeowner's policy will provide coverage in the event you or a resident of your household is legally responsible for injury to others or damage to others' property. Due to our litigious society and in order to protect your assets and retirement, we recommend at least $300,000 of coverage. 

Types of Optional Coverage You May Want to Consider:

Your homeowner's policy will not protect you or your property in all situations. All of the exclusions and specific language can be found in your policy. Common examples of coverage not included in the basic policy that many of our clients have purchased for an additional premium include: 

Enhancement Endorsement:  this endorsement to your policy package has a number of important coverage together at a reduced premium. The different types of coverage in this endorsement include sewer & drain backup, increased special limits on personal property. We highly recommend this endorsement to all of our clients. 

Flood Insurance:  homeowner's policies DO NOT cover flood damage. Flood coverage is available to everyone, and even if your home is not in a designated flood plain, do not assume you will never incur flood damage. 

"Floaters" on Valuable Items:  high value property such as jewelry, furs, guns, coins and fine arts are covered on a very limited basis in the basic policy. A "floater" covers possessions of high value for their full value. 

Water Backup and Sump Overflow:  losses from water backup and sump overflow are not covered under your homeowner's insurance policy. This coverage is available as an endorsement. 

Home Business Coverage:  more and more of our clients are conducting business from their homes. Your homeowner's policy places limitations on coverage for business property and liability. There are several options available to cover a home business. We would be happy to discuss these options with you. 

Earthquake:  your homeowner's policy does not provide any coverage for damage due to earthquake. In areas where earthquakes are uncommon, this coverage is very inexpensive. Many of our clients purchase this coverage due to the low premium. 

Umbrella:  if higher limits of protection are desired, a personal catastrophe liability policy can be written which can extend your protection to $1,000,000 or more.