Whether just starting out with that first home, or you just moved in to the house of your dreams, it is important to protect that investment with a sound homeowners insurance policy. The right homeowners insurance policy is one that is affordable, yet still gives that peace of mind and sleep peacefully at night knowing not all will be lose in the event of a disaster.
According to the Insurance Information Institute, just about 1 in every 15 insured homes have a claim each year. Maybe it was a stovetop fire that got a little out of control and ruined your appliances. Or maybe a hail storm damaged your roof and needs replaced. Homeowners insurance has your back and will cover these damages. There are also several personal property coverage options for homeowners insurance too, so be sure to ask your agent how to protect the things inside your home. Everything from furniture to clothing to electronics, there is a policy available to cover these items. And if something is not included in a standard policy, we can always add a rider or endorsement to ensure you have the coverage that makes you comfortable.
Does Everyone have to Buy Homeowners Insurance?
Unlike car insurance, it is not mandatory to have homeowners insurance if you own a house. However, your lender will almost always require homeowners insurance to attain a mortgage to protect their asset until that house is paid off in full. It is always wise to carry insurance on what is usually one of the largest investments people make in their lives to protect that asset in case of unforeseen circumstances. In many cases, the insurance premium can be rolled into your monthly mortgage bill and held in escrow (along with your property taxes) to budget the correct amount in one low monthly payment. Also, bundling different insurance policies together (i.e. auto insurance, boat insurance, motorcycle insurance, etc.) can offer discounts on the premium you pay either monthly or annually. Additional discounts can come your way by having smoke alarms or fire extinguishers in your home and/or have a home security system installed. Ask one of our agents the many ways you can save on homeowners insurance when applying for a policy that is customized exactly for your needs.
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Examples of what Homeowners Insurance can Cover
There are many examples of how and when a homeowners insurance policy can be used. After purchasing a home and moving in, it is always a good idea to complete a home inventory and keep it as up-to-date as possible. Start by making a list of possessions with details such as make and model or where the item was purchased and at what price (copies of receipts can help too in the event of a claim). Many people take photos of rooms with important items in them or do a video walkthrough of the house documenting these items. This is a good practice, though just make sure the media is safe. Keep the files in a computer off-site in case the hard drive is damaged in a disaster, or keep copies of the photos and videos in a safe deposit box. Below are some examples of when it is possible to file a claim under typical homeowners insurance policies.
Total Repair or Rebuild
For example, a fierce snowstorm hits the region and your roof collapses under the weight of this record snowfall. The outside elements come in and ruins everything from the brand new kitchen you just installed to the flat screen TV in the living room. Homeowners insurance will cover all of these damages.
For example, an accidental fire guts your kitchen while you are away one weekend and there’s nowhere to stay while you wait for repairs. If you can’t stay in your home during these repairs, homeowners insurance will cover a hotel stay (and even things like meals above usual costs) until you can get back into the house.
Injuries / Lawsuits
For example, while having a family reunion, your sister trips over an extension cord and breaks her arm while falling. Medical costs to any visitor to your home or property will be covered by homeowners insurance. And, if you’re not on good terms with your sister (who happens to be an attorney) and she ends up suing you; certain homeowners insurance policies will pay towards legal expenses, and even pay for lost wages while that person is injured.
Losses Happening away from Home
For example, while on your honeymoon, someone breaks into your hotel room while you and your fiance are cliff diving and steals the wedding rings. A personal possessions endorsement will cover these losses (up to your limit). Your passports were also taken in this honeymoon robbery? No worries, a homeowners policy can help cover the cost of replacing those passports and any other valuable papers too.
Types of Optional Homeowners Insurance Coverages to Consider
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.
Homeowners 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 or rider.
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 and we will be happy to discuss the different options available to you.
Your homeowners policy does not provide any coverage for damage due to an earthquake. In areas where earthquakes are uncommon, this coverage is very inexpensive. Many of our clients purchase this coverage due to the low premium.
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.
Frequently Asked Questions Regarding Homeowners Insurance
What are typical homeowners insurance rates?
Many factors contribute to what homeowners insurance cost, being where the house is located being among one of the top factors and can vary from zip code to zip code even within the same region. To give an idea though, for a $200,000 homeowners policy with a $1,000 deductible, the average annual cost in Pennsylvania is $801, New York’s average is $935, and the national average is about $1,200.
How do I shop for Homeowners insurance?
At Great Lakes Insurance, we do the shopping for you! With over 100 carriers, both on the national and regional level, we are here to ensure a great rate for your homeowners insurance. Let one of our highly qualified agents help you every step of the way.
How do homeowners insurance deductibles work?
The deductible is the amount you’ll have to pay in order to receive a claim. For example, if there are $20,000 worth of damages to your house because of a wind storm, and your deductible is $1,000, that money will be subtracted out of the total monies paid out by the insurance company to cover the damage.
How much coverage should you have for homeowners insurance?
It all depends on how much your house is worth, but generally speaking a homeowners insurance will cover a minimum of $100,000, but it is recommended to purchase in upwards of $300,000 to $500,000 worth of liability coverage to ensure covering everything inside the house in the unfortunate case of a complete loss.
What is not covered by homeowners insurance?
Most natural disasters (fires, lightning strikes, hail, heavy wind) are covered by homeowners insurance. However, it is important to know that there are certain natural disasters not covered by the typical homeowners insurance policy. Common examples include earthquakes and floods, which are riders that can be added on to a typical homeowners policy, but not covered in a typical homeowners policy.
Is a shed covered by my homeowners insurance?
Generally speaking, a standard homeowners insurance will cover all structures on your property such as sheds, detached garages, workshops, fence, gazebo, etc. Be sure to ask any questions to one of our highly experienced agents.