HOMEOWNERS INSURANCE

Home is where your family lives- protect them with the right insurance

home is where your family is- protect it with the right insuranceFor the majority of people, a home is the most expensive asset you will ever buy.  Home insurance is therefore, perhaps, the most important policy in your protection portfolio.

Unfortunately, because of the vast differences between property risks, weather patterns, natural damages, building values, and the home owners themselves, deciding on the right home insurance coverage can be daunting.  Leaving out a necessary endorsement could mean paying thousands of dollars in repairs- or even losing your house.  Learning about your policy options is a vital part of home ownership.

Most general home insurance policies will minimize or at least subsidize repair costs, the replacement of stolen, broken, or damaged items, and even help contribute to living expenses should something happen to your house.  Natural disasters such as fires, wind and hail storms, and lightning strikes are usually covered, with events like earthquakes or floods necessitating an extra policy.  Loss due to theft or vandalism and many liability claims are also taken care of by your insurance.

What is covered under a standard home insurance policy?

While every state has different minimum requirements for coverage, and every policy will be different depending on the provider and the person being insured, there are several basic categories that most home insurance policies will protect:

Dwelling: reimburses the owner for damages to their house and any unattached structures such as fences, detached garages, and storage sheds.

 

Personal Property: home insurance that protects the possessions stored in your house such as furniture, clothing, jewelry, and electronics in the event of theft or destruction.

 

Legal Liability: covers home owners against most lawsuit expenses if you are found legally responsible for another person’s injury on your property. Also protects you in the event that you damaged someone else’s property.

 

Medical Liability: home insurance that covers the medical costs a person may incur if they get injured while on your property, or even away from property, such as if they are bitten by your dog.

 

Loss of Use: reimburses you for hotel or alternative dwelling costs if your home becomes too damaged to live in while repairs are being made. Typically, this amount ranges from 10 to 20 percent of your dwelling coverage.

Please note that these parameters are only examples of what the typical customer could expect to receive for this type of policy.  Actual coverage will depend on the provider and the person being insured.  Please talk to your A.R. Davis agent to find out what type of coverage you qualify for.

What categories can be added to a minimum policy?

Guaranteed Replacement Cost: barring certain natural disasters, accidents, or acts of war, this addition delivers the most complete coverage for your home. However, it is important to note that your home insurance company will require you to meet a minimum baseline before you qualify. Typical conditions include increasing the amount of coverage you purchase on an annual, quarterly, or monthly renewal schedule to keep up with the inflation rate.

 

Inflation Guard Endorsement: this policy will adjust your home insurance limits automatically to keep them at or above 80 percent of your home’s total replacement cost, protecting against financial loss should the house need to be replaced and purchasing or repair cost inflation occurs.

 

Scheduled Personal Property Endorsement: possessions such as specific jewelry items, gun collections, antiques, or other important belongings are itemized and detailed and are typically fully covered under the endorsement.

 

Increased Limits on Money and Securities: this home insurance policy increases the coverage amount for money, deeds, and other vital financial documents or assets.

 

Secondary Residence Premises Endorsement: an endorsement that insures a secondary residence like a vacation home. Most standard home insurance policies do not automatically cover a secondary house, so owners of multiple properties need to purchase extra coverage.

 

Watercraft Endorsement: offers personal and medical liability coverage for small boats and boat owners.

 

Credit Card Forgery and Depositors Forgery Coverage Endorsement: insures against unauthorized charges made to a lost or stolen credit card and check forgeries. Generally, this coverage is limited based on the rules of the specific policy.

When it comes to home insurance, earthquake and sewer coverages can be added onto your standard policy.  Not everyone needs these endorsements; read on to discover whether you should consider purchasing them:

Earthquake insurance

Who needs earthquake insurance?

While most people immediately think “California” when they think “U.S. earthquake,” there are many other major faultlines besides the San Andreas, and many other areas of the nation that are considered high-risk for a devastating quake. The states of Alaska, California, Hawaii, Nevada, Washington, Idaho, Wyoming, Montana, Utah, and Oregon all frequently experience quakes of 3.5 magnitude or greater. Any American living in these states should heavily consider the extra protection. Even if you live outside the danger zone, purchasing an earthquake rider on your home insurance can cover the cost of fixing stress fractures from shifting or fires caused by quakes, and can replace possessions lost to mudslides, sinkholes, or other “moving earth” damage.

 

Are there special rates for Californians?

Of course, there’s no denying that Californians have a significantly greater risk for injury or property damage from an earthquake than their neighbors. If you live in the state of California, it’s a good bet you live within 15 miles of an active fault. In fact, there are 2,000 faultlines that run the length of California- and that’s only the ones scientists know about. Due to the extreme likelihood of devastation from a quake, Californians can purchase special coverage from the California Earthquake Authority.

If you would like to learn more about the risks an earthquake could pose for your area, visit Earthquake.gov.

Sewer backup insurance

The U.S. is well-known for our constant drive towards technological innovation. Unfortunately, many of America’s sewage lines aren’t quite as up-to-date as the electronics kept several floors above.

With some sewer lines reaching 100- or more- years of age, the disgusting, demoralizing problem of sewage backup is a real concern for homeowners. Sewage that flows back into a house can cause heavy damage to floors, walls, and furniture, flooded basements, or the destruction of any buried electrical lines. And aging pipes are only one possible cause of backups- heavy rainstorms, improper paper or grease diposal, a malfunctioning sump pump, or cracks from invading tree roots can also initiate a blocked and backed-up pipeline.

 

Should I purchase sewage backup coverage?

Like flood insurance, sewer backup policies aren’t usually included in a standard home insurance plan. You may think that the city you live in will need to reimburse you for the costs a backup incurs- however, it is actually the homeowner’s responsibility to fund all maintenance and repair expenses of their sewer lateral (the pipeline that carries their waste to the city sanitary sewer main). That means that any water damage, medical hazards, and of course, plumbing repair or replacement is the responsibility of the owner to pay for.

Sewage cleanup can get pricey. Most home insurance will add additional sewage coverage for a nominal yearly fee. Typically, sump-pump coverage is packaged with your sewage backup policy, but it will ultimately depend on your insurance provider.

Certain protections, such as flood insurance, require their own separate policy.  Continue reading to see what kinds of additional insurance some people may need.

Flood insurance

If you live on or near a flood plain or in a tropical area and your home has an active mortgage, it’s likely that you’re home insurance provider will require you to purchase flood insurance. Depending on where your home is located, you may qualify for flood insurance through the National Flood Insurance Program.

To read more about the NFIP and flood insurance from A.R. Davis, please click here.

 

Besides weather events, what other damages will flood insurance protect me from?

The biggest threat to your home’s wellbeing is water damage. Even a house built thousands of miles away from a flood-prone area can still be decimated by broken, frozen, or burst pipes. It is always wise to consider purchasing flood insurance.

Mold insurance

At least 1,000 species of mold are commonly found in the U.S. Even a small outbreak can quickly overtake a home, necessitating a huge renovation project, or cause health issues as mild as sneezy allergic reactions to as serious as triggering asthma attacks or other breathing problems.

Mold will develop in nearly any moist, dark, or undisturbed area. While homeowners who live in humid environments and areas prone to floods are especially susceptible, any house can grow a mold invasion if a persistent leak or moisture issue isn’t fixed or found in time. Leave a hole in the roof or a faucet too long, and you’re at risk for mold.

Most standard home insurance policies do not include any protection against mold invasion, except for cases where the mold originated from another, unrelated accident. For example, if your pipe bursts and mold happens to grow from the moisture, the cost of its removal will probably be covered under the initial pipe-repair claim. However, long-term damage caused by a chronically leak pipe or slowly seeping rainwater would have to be reversed on the homeowner’s own dime. The average cost of mold remediation? Between $15-20k.

 

Do I need mold insurance?

While preventing mold growth is the best way to protect your home, it’s usually worth purchasing an additional mold rider on your basic home insurance policy if you live in a warm, humid climate or if you live in an older home that wasn’t constructed with modern mold-resistant drywall, paint, and structural materials. Generally speaking, most mold insurance is a low-cost strategy of preventing an overwhelming financial problem down the road.

Termite insurance

Bugs are never going to be a popular choice of housemate, yet most houses will have some sort of insect infestation at least once. Many people aren’t aware their standard home insurance policy doesn’t cover the devastation that a termite nest can inflict on their property until the damage has already been done.

 

Am I at risk for termites?

While dealing with bugs is a fairly unavoidable facet of home ownership, some houses are more susceptible than others. Those that live in wet, warm, and humid environments like Hawaii have legendary termite issues, causing millions of dollars in damaged structures each year. In fact, Hawaiian infestations can get so bad that termites are considered the most harmful insect in the entire state!

But islanders aren’t the only victims. If you own a wooden home, a home built on a slab unseparated from the soil, or have a moist foundation, you are providing an optimal living space for a termite colony. Even too much leaf-litter in a gutter can attract bugs. Over time, these animals can chew through walls, floors, and support beams.

 

What does termite insurance cover?

The bad news is, most home insurance carriers don’t provide termite insurance, because an infestation is considered a preventable maintenance issue. However, some companies will offer “wood-destroying insect damage” coverage, or even a more basic “collateral damage” coverage. Collateral damage coverage could apply to termite damage if the bugs had compromised a piece of the structure which, when it failed, caused other portions of the home to fall in. If termites chew up a support wall and cause your roof to cave in, collateral damage coverage wouldn’t pay for the initial damage, but it would be able to pay for the repairs to anything deemed “accidental,” which might include the roof, other walls, even the floor if falling debris made a hole.

One way around the lack of traditional insurance coverage is to purchase a “termite bond” with a pest control company. This bond is like a service agreement with a promise- during the terms of the bond, the company comes to inspect and treat your property consistently over a period of time. If your house becomes infested while under the bond, the pest control company will pay for the entire removal of the colony and repairs to the structure.

If you suspect your home is at risk for termites, the best thing to do is order an inspection as soon as possible. Not all damage is visible right away. It’s also best to inspect and spray for bugs when purchasing a new property.

Please note that these parameters are only examples of what the typical customer could expect to receive for this type of policy.  Actual coverage will depend on the provider and the person being insured.  Please talk to your A.R. Davis agent to find out what type of coverage you qualify for.

What can I expect to insure with A.R. Davis?

A.R. Davis offers excellent, low-cost home insurance for single and multi-family houses.  The exact parameters of your policy will depend on the individual needs and qualifications of the business or person being covered.  Please speak to your A.R. Davis agent to find out what your policy will entail.

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