Congratulations homeowner! You’ve found your dream house. Now it’s time to protect your home with a home insurance plan that’s right for you and your family. After all, it’s not just the home you are protecting, but all those precious memories you’re about to make. When exploring home insurance options, start with our Q&A guide below. Then, reach out to your independent insurance agent to get a home insurance quote.
1. What is covered in a home insurance policy?
A standard homeowners insurance policy covers the structure, your belongings and liability.
Structure
This includes your physical house and any detached buildings like a garage, shed, fencing or other. Typically, damage from weather-related causes, like a windstorm, fire or tornado, is covered under your home insurance. However, flooding is the exception to this. Flood insurance must be purchased as its own policy. Normal wear and tear of structures are not typically covered in a standard homeowner’s insurance policy.
Belongings
This includes items inside your home and inside any outdoor structures. Examples of home belongings can consist of appliances, clothing, jewelry, tools, etc.
Liability
Homeowners insurance protects you by covering any lawsuits against you due to property damage or bodily injury caused by you or a family member. Also, liability covers you in case someone is injured while on your property.
You can learn more about home insurance here.
2. What isn’t covered in a home insurance policy?
Flooding is not a covered loss. If you are concerned about a potential flood to your home, consider purchasing flood insurance. You can do this by contacting your independent insurance agent or by visiting FEMA’s website. According to FEMA, “floods can happen anywhere – just one inch of floodwater can cause up to $25,000 in damage.”1
There are other risks not covered in a standard home insurance policy. Still, many insurance carriers offer endorsements so you can add-on to your policy, ensuring you are fully covered.
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3. What coverages should I consider adding to my policy?
Depending on you and your family’s unique needs, consider asking your independent insurance agent about the following optional coverages.
Underground Service Line Coverage
Water, waste, heating, cable and internet service lines are a homeowner’s responsibility if the lines break, tear, rupture or collapse. You can learn more about this coverage here.
Home Cyber and Identity Theft Protection
Cybercriminals are relentless in their attempts to steal your private information and identity. These coverages can help cover costs if you fall victim to a cyberattack, cyber extortion or online fraud.
Personal Umbrella
Some homeowners want an extra layer of protection. An umbrella policy can help cover additional expenses due to the threat of a large lawsuit. Although grim, consider the example in which you host a pool party, a child accidentally drowns in your pool, and the child’s family sues you. In this scenario, having umbrella insurance may help to protect you from out of pocket financial liability. Click here for additional scenarios and reasons why adding umbrella insurance to your policy may be a good idea.
4. What happens if I incur a total loss to my home?
When purchasing a home insurance policy, you may want to consider Home Replacement Cost in the event of a total loss (e.g., a fire causes your home to burn down and completely unable to restore). Generally, a standard home insurance policy replaces the structure on an actual cash value basis. Here’s the difference between the two:
Replacement Cost
Replacement cost is additional coverage you can add-on to your policy. Replacement cost covers the original cost to replace or repair an item that’s been accidentally damaged, destroyed or stolen. Depreciation (normal wear and tear of the item) is not a factor in replacement cost.
Example: Let’s say you file a home insurance claim due to a home theft that resulted in your TV being stolen. When you originally purchased your TV, you paid $1,000. Your claim settlement would cover the full $1,000 (after you fulfill your deductible).
Actual Cost Value (ACV)
Your home insurance is likely ACV, which covers the actual cost minus depreciation to replace or repair an item that’s been damaged accidentally, stolen or destroyed. Depreciation for an item includes normal wear and tear of an item over time.
Example: You file a claim because your TV was stolen during a burglary. Because your TV is 3-years old, your insurance company may offer you a settlement of $700 (includes depreciation), which covers the cost of what the TV was worth immediately before the burglary (less any deductible).
5. How can I get the best rate on my home insurance policy?
Start with finding an independent insurance agent, who will work with you to determine what level of coverage you need. Then, your agent will do the shopping for you to find the best insurance at the right price.
Be sure to ask your agent about discounts. Each insurance provider is unique in its offerings, but many will offer various discounts simply for being a new customer. Some other popular discounts you should inquire about include: multiple policy discount (when you bundle your home and auto insurance), newer home or newer roof discount, a smart fire alarm system discount and a claims-free discount if you have never filed a claim.
Also, depending on the payment plan you select, your insurance company may offer an additional discount. For instance, Integrity Insurance offers a discount when you pay your bill on time, or if you choose to pay in full.
If you are interested in learning more about home insurance with Integrity, click here.
This article is for informational and suggestion purposes only. Implementing one or more of these suggestions does not guarantee coverage. If any insurance policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies. For full details on Integrity’s home insurance coverages and discounts, contact your local, independent Integrity insurance agent.
Sources
1FEMA