Your home is one of your family’s biggest assets for sure but more importantly your home is where you keep most of your personal property, clothes, prized possessions, memorabilia and valuables. It’s where you and your loved ones eat, entertain, laugh, cry and lie your heads down to sleep…it’s your home! Why would you ever simply shop for the cheapest cost for home insurance? Unfortunately, that’s what some people do.
Home insurance usually starts with the structure value. A replacement cost evaluation will determine the cost to replace your home. Some insurance companies will insure your home at replacement value which means that whatever the cost to rebuild your home after a loss is what will be paid by the insurance company to rebuild your home. It’s more common to have modified replacement cost coverage which will extend the home value on your insurance policy by a percentage, usually 25-50%. If you have a 150% modified replacement cost endorsement with your home coverage set at $500,000 and incurred an insurance loss, the insurance company will pay up to $750,000 (150% of the insured limit)…with 125% replacement cost endorsement the total structure coverage would be $625,000.
Once a structure value is determined a policy structure can start shaping as most home owners insurance policies are package policies…meaning that the other parts of coverage and standard policy forms are included for coverage. It’s all good stuff, some you can use and some you may not have a risk exposure to. Common policy coverage usually includes 10% of the home value for Other Structures, 50% of home value for Personal Property at actual cash value (includes depreciation), 20% for Loss of Use, $100,000 Personal Liability and $1,000 for Medical Payments.
Some very basic coverage ideas that make sense for most home owners are adding “replacement cost” coverage to personal property and increasing personal liability to $500,000. These are pretty simple changes to a basic policy…but that’s about where easy ends!
How old is your home? Do you need Ordinance & Law Coverage? Although you’ve upgraded to “Replacement Cost” coverage for your personal property, did you know that there’s limited coverage for more than a handful of specific personal property coverage’s like jewelry, watches, silverware, personal property used for business, firearms? To name a few. DO you have enough coverage and what are your options to increase coverage in some of those areas of personal property? DO you have a swimming pool or an out-of-the-ordinary exposure to risk not shared with most homeowners? IS that covered and, if not, how can I get coverage for it? DO you have a tenant or roomer/boarder? DO you have any pets? DO you operate a business from home? DO you know that flood and earthquake coverage are excluded from your home insurance but that you can get coverage for them in most cases?
Choosing a deductible isn’t right or wrong; it’s a personal decision to be made by each homeowner after they have all of the information necessary to make an informed decision. If you’re within just a few miles from the coast or live in Barnstable County you may have to make a decision about a hurricane deductible, wind deductible or CAT deductible and now you need even more information because you may be comparing policies with very different coverage.
At Atlantic Insurance, we breakdown your exposures and explain your coverage options so that you’ll know what’s covered and what’s not covered before you have anything happen (lightning strike, tree fall, roof leak, slip & fall, puff back from furnace, water pipe leak/break, hurricane damage) at your home. You’ll have the information you need to make an informed decision. Give us a call at 781-585-5551; we look forward to helping you obtain the proper coverage at the best price.