Let’s take a trip down memory lane shall we? Remember when 2006 was a wonderful year to buy a house? Loans were so much easier to obtain when you didn’t have to have a down payment. Fast forward 2 years later, to when we were all crying because the market crash of 2008 happened; and then BAM, all of a sudden we owe more on our homes than what they are worth!
Now, if you are among the lucky ones that bought your home way before the crash you might be in a different situation. Your home over the years might have increased in value and could be worth more than what you owe now. This is why having the right amount of insurance is super important on both sides of the fence.
You want to make sure you insure your home for the total cost to REPLACE your home. If your house burns to the ground, you need to make sure you have enough coverage to rebuild your home and make you whole. The cost of rebuilding a home is much more than just what it is worth or what you owe on it. Insurance agents calculate this cost by using a computer system called a “Replacement cost calculator” that will put in for example, how many bathrooms, square footage, and floor coverings in your home to come up with an estimate on what your specific home would cost to rebuild. The purpose of having insurance, in general, is to protect you in the event that something happens and a loss occurs, your insurance company wants to help put you right back where you were before the loss, as long as they are aware of the values of all that was lost!
What Protection Does It Offer?
A standard homeowners insurance policy insures the home itself and the things you keep in it. It is typically a package policy, which 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. Let’s look at each coverage part in more detail:
Part l: Property Protection
Dwelling: This offers protection as a result of damage to the structure of your home including fixtures, plumbing and heating due to a covered loss, such as fire or hail storm damage. It does not cover the normal wear and tear of your home or maintenance-related problems. You need enough coverage for the cost of rebuilding or repairing your home, less the cost of the land. Determining this new replacement can be somewhat complex, but we can assist with this process.
Other Structures: This includes coverage for detached structures, such as a garage, garden shed, and fixtures attached to land such as a driveway, sidewalks, patio, fence and swimming pool.
Personal Property: This covers the contents and personal items in your home such as furniture, clothing and sporting goods.
This also extends to your personal belongings anywhere in the world, up to a maximum value per item. To determine your property’s value, we’ll provide you with a home inventory checklist to help you quickly and easily itemize your belongings.
We recommend insuring your personal property for its replacement cost value. The longer you own your belongings the less value they hold. Replacement cost value ensures that you can replace yesterday’s purchases at today’s prices.
Loss of Use: In the event that a covered loss such as fire forces you from your home, Loss of Use provides a safety net for additional expenses over and above your normal living expenses while you are unable to live in your home, up to the policy limit.
Part ll: Liability to Others
The Liability to Others portion of your policy covers you against lawsuits for bodily injury or property damage that you or family members may cause to other people. It pays for both the cost of litigation and court awards, up to the limit of your policy. It also covers you at home or away.
If a visitor is injured in your home, medical payments coverage allows the person to submit medical bills directly to your insurance company. The benefit is that expenses are paid to the injured person up to the policy limit without a liability claim being filed against you.
Disasters – Damage caused by most disasters is covered in a standard homeowners policy, but floods and earthquakes are excluded. Upon request, we can provide coverage information about each.
Vacant Property – If your home is left vacant due to a move or new construction, you are vulnerable to claims for loss from vandalism and other mishaps. Please check with our agency to learn more about the coverage options available.
These are all reasons why insurance reviews are important! Your policy should match the changes within your life. Stay current and Stapleton Insurance Group will stay committed to making sure you are covered.