Your Homeowner Insurance Policy Coverage Checklist
June 28 is National Insurance Awareness Day. Although it’s not quite as much fun as Talk Like a Pirate Day, it’s a valuable reminder for savvy homeowners to review their homeowners insurance policy, especially as a survey carried out by the National Association of Insurance Commissioners (NAIC) found that over half of America’s homeowners haven’t reviewed their coverage for over a year1.Chances are you’re already familiar with the basics of homeowner insurance coverage. However, not all policies are the same. Reviewing your current policy can contribute to your peace of mind all year long, so we’re providing you with a coverage “checklist” to make this task easier.
What is basic homeowner insurance coverage?Basic homeowner insurance coverage may include dwelling coverage. It pays for damage to your home and detached structures, including sheds, fences, and garages up to the limit you specify. It will also include personal property coverage, which helps you repair or replace your home’s contents. These usually include furniture, appliances, electronics, and clothing if they’re damaged by a fire, weather, or stolen during a burglary.
Tip: If you haven’t yet made out an inventory of your personal property, now’s a good time to consider doing so. A phone app like Sortly can help simplify this task.
Additional home insurance coverage can provide peace-of-mindAfter reviewing your basic coverage, you may decide it’s time to add or increase coverage. One option is replacement cost coverage. Instead of actual cash value coverage, which factors in depreciation to your possessions before issuing payment, replacement cost coverage will provide you with a bigger payment. This coverage helps you replace items at today’s replacement cost, so you won’t have to make up the difference yourself.
Other home insurance coverage options to consider
- Liability and medical protection will protect you in the event that someone injures themselves on your property and files a claim against you.
- Loss of use protection pays for your living expenses if your home is too damaged for you to inhabit while it’s being repaired or rebuilt.
- Valuable items protection does just what it says. It provides additional coverage for jewelry, antiques, fine art, electronics, computer equipment, and more.
Specialized homeowner insurance for certain situationsFlood insurance is often overlooked by homeowners if their mortgage lender didn’t make it a mandatory purchase. But even if you’re not in a low-lying area, it’s worth checking out the Federal Emergency Management Agency’s (FEMA’s) Floodsmart web site. According to FEMA, people outside high-risk flood zones file more than 20% of all flood insurance claims.
Earthquake insurance can sometimes be added to a standard homeowner’s insurance policy, although you may have to purchase separate, stand-alone insurance. The risk of being affected by an earthquake isn’t limited to California – check out this online map to see if you should consider adding coverage.
Umbrella coverage covers you from potentially expensive incidents that aren’t covered by the coverages already described here. It protects you from major claims and lawsuits – things most of us would never anticipate until they actually happen. It covers you when the liability protection provided by your homeowner’s insurance and auto insurance is maxed out, or if these policies don’t offer protection for a particular incident.
Here are some situations where umbrella coverage can make a difference: property damage, liability coverage on rental units you own, malicious prosecution, libel, slander, and other personal liability situations. For example, if a neighbor’s child is injured on your back yard trampoline or bitten by your dog, or if your car is totaled by an under-insured party, umbrella coverage could save the day. Click here for examples of claims covered by umbrella coverage.
Additional Resources: The National Association of Insurance Commissioners website has lots of consumer-friendly information.
If you have questions about your homeowner insurance coverage, please contact your insurance agent or your Certainty mortgage professional. We can help you manage every aspect of home ownership.
1 Home Insurance: What you need to know
The considerations posed in this blog are for informational purposes only and should not be considered legal advice or advice of a registered/licensed insurance agent.
- Jun 25, 2020