Know the difference between being protected and cheap homeowners insurance.
Do you want a homeowner’s insurance policy that provides basic coverage, one that “satisfies mortgage requirements,” or do you want a policy that gives you the additional coverage you may need in the event of a loss? Don’t be caught by surprise when the unexpected occurs. Be an informed consumer and know what you’re buying. When comparing your homeowner’s insurance quotes and policies, ask yourself if the following coverages are important to you:
- Dog Liability – Coverage if your dog injures another person(s). Most homeowners policies exclude dog liability but will allow you to buy-back a specific dollar amount by endorsement for certain breeds of dogs. Vicious breeds, mixes of vicious breeds and dogs with a prior bite or attack history are ineligible for coverage.
- Identity Theft – Identity theft happens when a criminal wrongfully obtains and uses personal information belonging to someone else. The average cost of restoring your identity after a loss is $8,000. This coverage reimburses you for expenses you might incur in restoring your identity and credit.
- Ordinance or Law – This coverage provides for the cost associated with the enforcement of any ordinance or law regulating the construction, repair or demolition of a building or structure. Most policies provide some coverage automatically. It’s important to remember that the older the home, the more coverage you may need.
- Personal injury – Injury, other than bodily injury, arising from intentional torts such as libel, slander, or invasion of privacy. This coverage is crucial in this age of social media.
- Replacement cost on contents (RCC) – The cost to replace a covered item (same like kind and quality) without depreciation. Example: If you have a 5-year-old TV, 10-year-old washer and dryer, and 15-year-old refrigerator that are all struck by lighting, without replacement cost on contents, you will get the depreciated value of these items; with RCC you will get the same like kind and quality items at today’s prices.
- Water backup of sewers and drains – Provides $5,000 of coverage for back up through a sewer or drain or overflow or discharge of a sump, sump pump or related equipment, even if the equipment suffers a mechanical breakdown.
- Water damage – Provides coverage for water damage that is the result of a discharge or overflow of plumbing, heating, air conditioning, or household appliance. If you have an HO8 policy form, you do not have this coverage. Some HO-3 policies provide full water damage limits and some exclude coverage for homes over 40 years old. If the coverage is excluded, you may have the option to buy-back limited water damage coverage (usually limited to $10,000).
As consumers, we understand the premium does matter, but more importantly knowing that there is coverage at claim time is why we are buying insurance. When you make that decision to purchase your homeowners insurance, you may decide to keep your premiums lower and not to buy certain coverages. Consult with a licensed agent to discuss your options before the loss occurs.