FREQUENTLY ASKED QUESTIONS

HOMEOWNERS INSURANCE

Q: What exactly does a Homeowners policy cover?
A: “Exact” coverage is impossible to define because there are different policies and about 900 insurance companies writing Property/Casualty business in the United States. However, 80% of Homeowners policies are based on a standard form. All Homeowners policies cover two important areas: Property and Liability. Property insurance covers your structures and possessions. Personal Liability, as its name implies, means you're legally obligated to pay money to another person for actions caused by you, your family, or your property. That liability extends to medical payments to others for injuries caused by you or your family.

Q: What do I need to know when purchasing homeowners insurance?
A: This is a three-part answer:
• Get the amount and type of insurance that you need.
• Determine the amount of personal property insurance and personal liability coverage that you need.
• Select any additional endorsements you want to add to your policy. For example, do you want the personal property replacement cost endorsement?

Q: What is "actual cash value"?
A: When "actual cash value" is used in a policy, a policy owner is entitled to the depreciated value of the damaged property.

Q: What is replacement cost"?
A: When "replacement cost" coverage is used in a policy, a policy owner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Q: Where and when is my personal property covered?
A: Coverage C of a homeowners policy provides named perils coverage. This applies to all your personal property (except property that is specifically excluded). Personal property is covered anywhere in the world.

Q: Are floods, earthquakes, and other natural disasters covered?
A: Most catastrophes are covered. Flood and earthquake damage, however, are not covered by a standard policy and both perils are more common than many people realize. We can advise you on such normally excluded conditions as floods and earthquakes and arrange coverage as needed.

Q: I recently purchased a $3000 piece of jewelry. Is it covered under my homeowner's policy?
A: The homeowner's policy does provide coverage, but with a limit of $1000 and only for theft. To insure the item for its full value and all risk coverage, it is necessary to provide an up to date appraisal. Scheduled items are not subject to the homeowners deductible.

Q: Am I protected from Identity Theft?
A: Identity Fraud expense coverage is available for an additional yearly premium of approximately $35.00. Identity Fraud is the fastest growing white-collar crime and this coverage will cover expenses incurred as a direct result of identity fraud during the policy period.  We strongly recommend this coverage.

Q: Are there exclusions I should know about?
A: Exclusions listed and defined in your policy might include neglect, intentional loss, “earth movement,” general power failure, and even damage caused by war. If you fail to take care of your property (e.g., a leaky roof), you might not be covered. Obviously, if you intend to lose an object or damage your property, there's no coverage. One other exclusion that can be costly is the Ordinance or Law exclusion. Building codes established by governmental bodies that drive up the cost of rebuilding or repairing after a loss occurs might not be covered by your insurance policy. Thus, if you discover when replacing damaged property that current law demands higher grade or more expensive materials than those you're replacing, the new materials might not be covered fully.

Q: How expensive is renters insurance?
A: Renters insurance is typically available for as little as $150 a year, but the cost is directly related to the amount of insurance protection that you need.

Q: Does my landlord's insurance protect me?
A: Generally, no. The property owner's insurance covers the building itself and seldom a tenant's possessions or liability. Clarify this with your landlord before signing a lease.

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