Homeowner’s Insurance

Homeowner’s insurance is often the last thing on any person’s mind until they truly have need of it.

Attempting to sort through your coverage when filing a claim can make a stressful situation much worse. Understanding your insurance policy and reviewing it often is the key to avoiding frustration, inconvenience, and great financial loss.

Homeowner’s insurance often refers to insurance of the home’s structure as well as the personal contents inside. The structural insurance covers numerous damages, including:

Fire and smoke
Lightning, wind, and hail
Vehicles, explosions, and various falling debris
Theft, vandalism, riots and civil commotions
Broken glass and sudden water damage (frozen/busted pipes)
Note that flood, hurricane, and earthquake coverage are separate policies that should be discussed with an insurance agent, if necessary.

The structural portion of your homeowner’s insurance also covers any structure attached to your home, such as a garage or deck. Unattached structures may also be covered unless used for business or rental purposes.

To figure your structural insurance, you will first need to determine how much it will cost to rebuild your home on the current lot in today’s market. A local builder or real estate appraiser will be able to evaluate the market rate per square foot of your home. This figure multiplied by your home’s square footage will equal the total of your structural insurance.

Personal property insurance applies to the things in your home. This covers the basics such as clothing and furniture to an amount that is typically 55 percent of the insurance on your home. Any of the following items may fall under special limits, requiring upgraded or separate policies:

Jewelry and furs
Firearms
Rare coins, stamp collections
Silver and gold wares
Rugs, tapestries, and wall hangings

To determine your personal property portion of the insurance, it is important to perform an inventory of belongings. Begin by listing all the items in the home, including the garage and attic. List under each item:

Date the item was purchased
Original cost (copy of receipt if available)
Estimated current value (appraisal if necessary)
Photo or video record of item
Item’s serial number or personal identification number

Two copies of the inventory should be made, keeping one in the home (fireproof safe) and one outside the home (safety deposit box). Seek your insurance agent’s advice on how to best inventory belongings with regards to your policy. A current, detailed inventory will make any necessary claims simpler to file and should ensure maximum compensation.

Personal liability coverage differs among policies, but your basic homeowner’s insurance should cover other’s injuries to a certain extent. Discuss this more thoroughly with your insurance agent. Remember that any home improvements, additions, or large personal purchases should be noted by your insurance agency and on the personal property inventory as soon as possible. Additionally, you should review your policy annually to check the value against changing local construction costs and codes. Though insurance coverage appears to be an awful lot of fuss over events that may never occur, it is important to invest time in understanding your policy should you ever be in need.

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