Personal Homeowners
What are my options for replacing income?
What exactly does a homeowners or tenant/renters policy cover?
What exposures are not covered under my basic homeowners policy which I should be sure to consider?
What is the difference between actual cash value and replacement cost?
Are there disasters my property insurance won't cover?
Do I need to insure my condominium or mobile home differently than insuring a home?
If your home suffered a severe fire loss and 65% of the structure was destroyed and your town has an ordinance that requires a structure with 50% or more damage to undergo a complete reconstruction, would you covered for this under a standard homeowners policy?
No! Unless your policy is endorsed for building law ordinance. This is a special endorsement that can be added at an additional premium.
You come home from work to find that sewage has backed up through the drains of sinks, tubs, and toilets and has damaged the walls and ceilings, not to mention the clean up that is needed! Will your policy respond?
No! Unless your policy is endorsed to provide backup of sewer and drains. This endorsement usually provides coverage for a set dollar limit of either $2,500 or $5,000. and must be specifically requested.
My TV was struck by lightning and cannot be repaired. I realize my policy provides coverage but my TV was 5 years old. What is my policy going to pay?
A basic Homeowners policy will pay you the depreciated value of your TV less your deductible. A policy endorsed with personal replacement cost coverage will reimburse you for a brand new TV of like, kind and quality less your policy deductible as long as you do replace the TV.
During a windstorm a tree in my yard fell on my neighbors shed. My neighbor brought over a bill to replace his shed and gardening tools for $1,000. Will my Homeowners policy cover this?
No. A windstorm is considered an "Act of God" loss. Your personal liability responds to losses you are legally liable for. Your neighbor needs to contact his insurance carrier for possible coverage.
What are my options for replacing income?
There are three basic ways to replace income:
- You may have short term sick leave through your place of employement ~ or they may provide a group disability plan. You should check with your employers benefits coordinator.
- Social Security disability benefits can be paid to workers whose disability is expected to last at least twelve months and prevents them from being gainfully employed.
- An individual disability income insurance policy will replace between 50% and 70% of your income. Although less than your normal income, the benefits under this policy are not taxable as income.
What exactly does a homeowners or tenant/renters policy cover?
A homeowners policy is intended to cover your buildings, contents, and liability (see below for a more detailed outline.) whereas a tenants policy covers your contents and liability. (The landlord is responsible to cover the actual building).
• Your Dwelling (Homeowners Only) - the main structure and all attached structures.
• Other Structures (Homeowners Only) - structures detached from your home, i.e., garages, sheds, barns.
• Contents - (Tenants and Homeowners) your belongings that are not permanently attached to your home.
• Loss of Use - (Tenants and Homeowners) extra expense coverage such as hotel room expense, if you suffer a covered loss and cannot stay in your home.
• Liability - (Tenants and Homeowners) coverage and legal defense for physical injury caused to others accidentally for which you are deemed liable.
• Medical Payments - (Tenants and Homeowners) a good will type of coverage. Provides payment for injuries to non-household members regardless of fault.
IMPORTANT NOTE: There are several things a basic homeowners policy either does not cover at all, or has very limited coverage available for (eg Flood, EQ, Jewelry) Please check out additional FAQ's for more information.
What exposures are not covered under my basic homeowners policy which I should be sure to consider?
Flood and Earthquake: One thing homeowners insurance doesn't cover is damage from floods or earthquake. So if you have a home in an area vulnerable to rising water or flooding, or are concerned about earth movement, ask us about how you can purchase flood or earth quake insurance.
Jewelry: Although jewelry would be considered part of your personal property or contents coverage ~ higher valued items should be specifically scheduled under your policy. This provides broader coverage, including mysterious disappearance, and assures that a proper value is set on the item.
Home Business: Business exposures in your home are not automatically covered by the basic homeowners policy. In some cases, the policy can be endorsed to cover your exposure; however, depending upon the exposure ~ you may need to have a seperate business owners policy. If you have a business in your home, contact our office for a thorough review.
Coinsurance is a contractual requirement that the insured carry agreed upon insurance-to-value, as specified by a percentage (usually 80%, 90% or 100%). If, at the time of loss, the limit of insurance is less than the value of the property times the coinsurance percentage, the insured will become a "co-insurer," along with the insurance company, when a loss occurs.
The purpose of coinsurance is not to punish an insured for carrying inadequate insurance-to-value, but rather to provide a financial incentive that: (1) encourages them to carry adequate limits in the event of major losses, and (2) rewards them (in many instances) with a significant premium reduction for doing so.
What is the difference between actual cash value and replacement cost?
If you have replacement cost coverage on either your dwelling or your personal belongings, in the event of a covered loss you would be reimbursed for the cost you incur to replace your damaged property, or items, brand new. If you were to have Actual Cash Value, this means you would be paid the current replacement cost of whatever you lost, minus depreciation. (Depreciation usually means the estimated wear and tear). In either case, the actual total amount you are reimbursed is subject to the terms and conditions of your particular policy, including deductibles and coverage limits.
Are there disasters my property insurance won't cover?
Even though "all risk" property insurance contracts do extend to cover a variety of calamities, there are standard exclusions where, in some cases, coverage is simply not available. For example, if you think in terms of natural disasters that may occur, like flood and earthquake, there are standard exclusions regarding these perils on most property policies. There are ways to purchase this coverage, however. More recently, the Federal Government passed legislation involving loss due to terrorism. Terrorism is now excluded from most commercial policies, but in some case may be bought back for an additional premium. Another more recent exclusion is damage or injury resulting from mold and fungi. As always, our recommendation is to discuss specifics with your agent, so that your needs may be properly addressed.
Do I need to insure my condominium or mobile home differently than insuring a home?
Owning a condominium or a mobile home puts you in a unique position.
If you own a condo, your condiminium association probably has an insurance policy for the common areas, but you are still responsible for insuring your own interests such as your personal property and liability. Sometimes you are responsible from the studs in ~ which can include appliances, wall to wall flooring etc. You also may want additional protection for special assessments. Because they are unique the best way to Be Ready is to speak with one of our insurance professionals so they can review the unique coverages involved when owning a condominium.
If you own a mobile home, it may need to be on a special policy as well, depending upon the age of the home and it's installation. Again, a call to one of the professionals at Clark-Mortenson allows you to review your specific situation and assure you are properly covered.
