HOME INSURANCE BASICS

The two most prevelant concerns about homeowners insurance are usually protection and price. Although regulated at the state level, home insurance is more of a national product than auto insurance, which means homeowners insurance is pretty much standard throughout the U.S. without much variation between the states.

Home insurance coverage consists of buying the right type of policy, having the proper levels of protection within that policy — including special provisions for jewelry and other particularly valuable possessions -- and supplementing this coverage with special protection against natural disasters that are not covered in your basic policy.

 

 

COVERAGE AMOUNTS FAQ

There are many special coverage provisions offered by insurers, but here are some basic questions that you should answer as part of the home insurance process:

What kind of coverage do I need to be adequately protected against serious loss In the event of a fire that destroys the house?

In most cases, you want to insure your dwelling and its contents for their replacement values, which will likely differ from the dwelling's market value and your personal property's depreciated cash value. You also should probably get a policy with automatic inflation adjustments so that the replacement cost keeps pace with the general level of price increases.

Standard coverage normally insures your possessions at 50 percent of the value of your dwelling. Many people boost this coverage to 70 or 75 percent with additional protection. But there are still individual limits on certain types of personal property (jewelrey, furs, etc.).

Free-standing structures on your property (garages, gazebos, tool sheds) are also covered, with standard protection equal to 10 percent of your dwelling. As is the case with your personal property, you should assess your needs to determine if you want to pay extra amounts to increase these levels of protection.

Also, pay attention to what might happen if you were to lose the use of your home for an extended period. Loss-of-use provisions are important elements of homeowners' policies, and coverage levels equal to 20 percent or more of your dwelling's insurance aren't unusual.

Am I protected against liability damages if someone were seriously injured in my home?

The standard level of liability protection in homeowners policies has been $100,000, but it's rising all the time. Today, $500,000 is not an uncommon amount, and even higher levels are recommended for affluent homeowners with lots of assets to protect. In this situation, "umbrella" policies have become popular. These policies provide excess liability coverage on both your homeowners and automobile policies.

What kind of coverage can I expect for certain items, such as computer equipment, cameras, jewelry, etc., whose replacement values far surpass normal coverage limits in my policy?

Standard policies may not come near covering the replacement costs of even moderate amounts of home electronics hardware or expensive possessions. For relatively small amounts, you can purchase "floaters" that will add protection to certain types of personal property.

In addition, equipment related to a home-based business may not be satisfactorily covered unless you obtain additional protection.

Should I obtain a high deductible on my homeowners coverage in order to save money on the policy?

The differences in annual premiums between policies with deductibles of $250 (you pay the first $250 of damage, the insurer pays the rest), $500 and $1,000 may easily be worth 10 to 20 percent of the annual premium. So, if you can afford the expenditure consider a larger deductible.


The insurance professionals at Burkhart Insurance Agency, Inc. will gladly answer all of your insurance questions and work with you to develop a solution for insurance coverage to meet your needs.  Contact us by phone at (800)737-3600, use our Customer Input Form, or send an E-mail to the_insurance_professionals@burkhartinsurance.com.