Whether it’s your castle, your abode, your pad, digs, or crib, your home is so much more than just four walls and a roof. It might have valuable jewelry with memories that are even more priceless, it might have equipment for a hobby that enriches your life, maybe there is some equipment you use for a personal business or startup.
Regardless of what you have inside of your home, your homeowners insurance is one of the most important things you may purchase.
What you need to know about Homeowners Insurance
There are five components to a standard homeowners policy and numerous options to consider in addition to those.
This is usually the largest and most expensive part of your homeowners insurance. If tied to a mortgage, it will usually cover the full amount of that mortgage.
The coverage of the dwelling is based on the replacement estimate. This is often misunderstood, as the insurance company wants to insure the house for what it will cost to rebuild, not the market value (think about how prices would have changed in 2008 if it were the latter!). Make sure to go over the replacement cost estimator with your agent — you’ll want to make sure any special features are properly accounted for.
Dwelling covers your home from damages. Liability covers your assets from damages.
What does that mean? If you hurt someone through a means other than your auto, like accidentally running into their kid at the store with a cart rather than your car in the parking lot, liability will cover you. It covers bodily injury and other mishaps that can result in lawsuits, both on and off your property.
There is a lot that your liability coverage can cover, and this is but a fraction of it. If you want to know more, please let us know.
If you were able to take the roof off your house, turn it upside down, and give it a good shake, personal property coverage would take care of what fell out.
At Bow Tie Financial Group we write personal property at what is called replacement cost, rather than actual cash value. This means your property is covered for what it costs to actually replace it instead of the depreciated value. Think of it this way: we want you to buy anything you need new, at the mall, not used, at Goodwill (not that we’re not fond of thrift shopping).
This includes big items, like furniture, appliances, and electronics. It also includes clothes, toiletries, books, and cookware. While art, jewelry, firearms, and small electronics are included, they’re often subject to a limit, which we’ll touch on shortly.
Medical payments is a simple, inexpensive coverage which is often cut short. It provides money to any guest who gets ill or injured on your property and is a great protection from having to go through a lawsuit for your friends to access your liability coverage for small problems.
Keeping your friends your friends when bad things happen is the happy side effect of medical payments.
Loss of Use
If you had a fire and your house was uninhabitable for eight months while it was repaired or rebuilt, what would you do? Where would you stay?
Loss of use covers the bills and payments above and beyond your normal costs of living while repairs are being made for any covered loss. Think of this as hotel bills, extra meals out while your kitchen is being repaired, and extra miles driven because of the new route to your job.
What are some considerations?
First off there are two things that are not covered in a standard homeowner’s policy:
Both flood and earthquake are completely separate policies and their coverage is extraordinarily specific.
Secondly, there are many limits to how much a policy will pay out for specific coverages. You’ll want to talk with your agent — hopefully us — about the following:
- Valuables like crystal, silverware, or collectibles
- Large electronics (TVs, desktop computers, etc.)
- Small electronics (cameras, laptops, tablets, mobile devices, etc.)
Finally, there are a lot of optional coverages, many we include with our base quotes, and some we don’t. Among these are:
- Water, sewer, and drain backup
- Mold and fungi
- Identity theft restoration
- Tree removal
- Watercraft and/or jet ski liability
- Home based business goods and/or liability
With all these options it can be difficult to figure out what you need and what you don’t need. We make it easy to get in touch with us so we can help you understand what you have and what you don’t — what you need and what you can leave.
Just click on the button and we’re more than happy to talk with you and dive in a deep as you want, whether it’s just scratching the surface or figuring out exactly which obscure coverage you need.