Your home is one of your most valuable assets you own, so you want to be sure and protect it well with a good insurance policy. If you’re buying your first home, it’s even more important to work with an agent who can explain each of the coverages and show you how to make adjustments to meet your individual needs.
What is covered by a homeowner’s insurance policy?
There are two main parts to a homeowner’s insurance policy. Whether you have a homeowner’s, renter’s, condo, or rental home policy, they all have these same two sections.
PART I: PROPERTY
This limit covers damage to the home and any attached structures, such as decks and garages. Make sure the limit on your policy is enough to rebuild your home. Land value is not a part of this calculation, and this replacement cost value is not tied to the market value. The Replacement Cost limit is just that; it’s the cost to replace / rebuild the structure from the ground up if it was completely destroyed.
This covers structures not attached to your home (detached garage, shed, mother-in-law unit, gazebo, fence, etc.). The coverage is automatically included in the policy, even if you don’t have any detached structures to insure.
Personal Property (Contents)
Your personal belongings are covered if they are stolen or damaged in a covered loss. This can include furniture, clothing, electronics, etc. If you have any high value items such as jewelry, art, camera equipment, musical instruments, or firearms, be sure you discuss scheduling these items on your policy. Most policies have sublimits for valuable items over a certain limit such as $2,500 per item for example. Scheduling items can have other benefits to you as well, such as waiving your deductible.
If your personal property is stolen as a result of a car break-in, this is where the coverage is found. Damage done to the car is covered under the auto policy, and your stolen personal belongings are covered under the home insurance policy.
Loss of Use – Additional Living Expense
This part of the policy will pay for additional costs that you incur when it is necessary to live away from your home due to damage from a covered cause of loss, such as a fire. This helps pay a hotel and other temporary living expenses while your home is being repaired.
PART II: LIABILITY
This provides defense and pays legal expenses if you, your family members, or your pets unintentionally injure someone or damage other people’s property. Typical limits available are $100,000, $300,000, and $500,000.
Personal liability coverage applies even when you’re away from the home.
Your guest slips on an icy sidewalk or trips down the stairs due to a loose railing.
A mail carrier or door-to-door salesperson falls and injures themselves on your property.
Your dog bites someone (some dog breeds are excluded) while on or off your property (park, neighbor’s house, while on a walk, etc.).
A neighbor’s child is injured while playing on your trampoline or swimming in your pool.
An intoxicated guest injures someone at a house party you host, and they claim s/he was overserved.
You knock someone over by accident while out on a run
Your teenager leaves an infant unattended while babysitting them, and the infant falls down the stairs injuring their head badly.
Your child wrote disparaging remarks about their teacher online, and the teacher sued for defamation of character.
Your child is found guilty of cyber-bullying another kid at school.
*Consider a Personal Umbrella (link) policy to add another layer of protection from these types of lawsuits.
This covers medical payments for a guest who becmes injured in your home, regardless of fault.
If you have any jewelry, fine art, rugs, expensive hobby equipment, firearms, silverware or other collectables that may be high in value, you may want to consider scheduling or listing them specifically on your home or renter’s insurance policy since most policies have sublimits for these types of items. In addition to the sublimits that may be too low, scheduling the items can be a way to eliminate the deductible for those items at the time of a loss. Depending on the value of the item, an appraisal may be required.
Additional Coverages to Consider
Most homeowner’s insurance policies have the same basic structure as outlined above, however, there are some coverages that may need to be endorsed or added onto the policy, such as those listed here.
Do you work from home or have an in-home business?
Be sure you review the sub-limit of property coverage available on your home policy when that equipment is used for your business, and consider purchasing an in-home business insurance policy to be more adequately insured.
Do you rent out your home, or any rooms in the home?
If you rent out any part of your home, talk with us about endorsements for this additional risk so you’re appropriately covered. Some insurance companies we work with now offer VRBO and Air BNB types of endorsements to accommodate this additional exposure. If they don’t, we have companies who specialize in these types of properties.
Do you have property in a storage unit, possibly from downsizing or having recently moved?
Your home insurance policy provides coverage for this, up to a certain limit, so you most likely don’t need to purchase additional insurance from the storage facility.
Water / Sewer Backup Coverage
This coverage is not always included, so check to see if it’s there, and choose a limit appropriate to your needs. While the insurance does not pay to replace the sewer line or any of the plumbing, it does cover the damage caused by the backup, which can be extensive and costly.
Identity Theft Coverage
Some policies have this coverage built in, and others require it be added.
Underground Water & Sewer Line Coverage
There are separate policies we can offer to cover the cost to repair these lines that run from your house to the street, should they become damaged or be invaded by tree roots.
If your home is damaged as the result of a flood, your home insurance policy does not cover the damage. You need a separate flood policy for this type of loss.
If your home is damaged as the result of an earthquake, your home insurance policy does not cover the damage. You need an earthquake policy for this type of loss.
Do you have kids who use social media? Check to see if this coverage is included. Cyber bullying and libel are claims that come up more now that social media is so prevalent in society.
If you are part of a condo or homeowner’s association that has a master insurance policy, check this coverage. If your association has a claim that is under the large deductible limit of the master policy, you may be faced with paying your portion of that deductible, and this coverage can help in this scenario.
Ordinance or Law
Even if your home is fairly new, check this coverage limit. If you have a loss and need to rebuild the home, there could be additional building construction codes and laws you need to abide by before you rebuild, and this coverage is critical in these circumstances.
Kristie English, M.Ed.
Principal / Agent
My neighbor’s tree fell on my house during a storm. Whose home insurance policy pays to repair the damage to my home?
Unless the tree was dying and you had warned the neighbor in writing to address the issue, your homeowner’s insurance policy would be the one to pay for this claim. Basically, wherever the tree falls, is where the tree is insured. Many times neighbors will split the cost of the deductible in such cases, as a friendly gesture. The downed tree must do property damage in order for it to be a covered loss. If the tree simply falls in your yard, there’s a good chance nobody’s insurance policy will be responsible for the cost of removing it from the property.
We're here to help you understand the best options for protecting your home.
Call us at (833) BIG-TREE / (425) 673-7948, or use our online form to request a quote.