Q: What is homeowner’s insurance?
A: Homeowner’s insurance is a form of personal lines insurance. The typical homeowner’s policy has two main sections providing coverage for:
- The property of the insured
- The potential personal liability of the insured
Q: What do I need to know when purchasing homeowner’s insurance?
A: The information you need to help you make the right homeowner’s insurance purchase includes:
- The amount and type of coverage that you need, including property and liability coverage
- What additional endorsements, if any, you would like to include in your policy—for example, do you want an endorsement for personal property replacement cost?
Q: What is “actual cash value?”
A: When “actual cash value” is used in a policy, a policy owner is entitled to the depreciated value of the damaged property.
Q: What is “replacement cost?”
A: When a policy includes replacement cost coverage, the policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.
Q: Where and when is my personal property covered?
A: Home Insurance policies typically provide six “sections” of coverage, referenced as Coverage A through F:
- Coverage A: Covers your dwelling.
- Coverage B: Covers other structures on your property such as sheds, barns, separate garages, or utility buildings.
- Coverage C: Covers your personal property for losses due to “named perils.”
- Coverage D: Reimburses you for expenses due to loss of use of your property, such as a hotel stay while your home is under repair after severe damage from a covered cause.
- Coverage E: Protects you in the event of personal liability claims, such as when someone is injured on your property due to your negligence.
- Coverage F: Pays medical expenses, such as treatment for someone who was injured on your property.
For this question, we are concerned with Coverage C, which provides named perils coverage. This applies to all your personal property (except property that is specifically excluded). “Named perils” includes events that can lead to the loss, theft, or damage to personal possessions. Your policy will list the perils specifically, but they can range from theft or fire to damage due to events such as severe weather or even riots or civil disturbances.
With the exception of excluded items, and within the limits of your policy, Coverage C applies to losses not only to property when it is inside your home, but also to property you have with you when you are away from home, such as items stolen from your person if you are out in public or from a vehicle or luggage when you are traveling.
Your policy will specifically list specific exclusions and limitations. For certain types of items such as very expensive devices, musical instruments, or jewelry, special policies, riders, or endorsements may be available.
Our agents are also always ready to answer your questions about protecting your personal property, and to review your coverage to make sure that it is up-to-date with your current needs.
Q: Should I purchase earthquake coverage?
A: Direct damages due to earthquakes are not covered under the standard homeowner’s insurance policy. If you live in an area that is prone to earthquakes, you may want to consider adding an earthquake endorsement to your homeowner’s insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements.
Q: Should I purchase flood coverage?
A: Standard homeowner’s insurance policies normally do not cover flood damage. However, if your property lies in a flood plain as determined by US Government Flood Maps, special flood insurance policies can protect you. Our insurance specialists will be pleased to assist you in determining your need for flood insurance and availability of coverage.