A Homeowners Insurance Policy provides financial protection in case of damage to the physical structure of the home, damage to the contents, loss of availability of a home, and liability for physical injury. The policies are fairly standard from state to state, yet the extent of coverage provided by your policy depends upon the policy you choose.

The common types of physical damage to a structure are covered by a basic policy. This includes fire, windstorm, hail, explosion, vandalism, and theft. More expensive policies cover damage from ice, snow, flooding from plumbing or other water containing appliances, freezing of plumbing or other water containing appliances, and a surge in the electrical system.

Other structures on your property may also be covered to a lesser extent. A general provision in your policy usually covers other structures at a value of 10% of your home coverage. If the house is insured for $100,000, other structures are insured for $10,000. If you have other structures on your property or the other structures on your property are valued at a higher rate than your coverage provides, this situation needs to be addressed with your agent.

The personal contents of a home are generally covered at a rate of 50% to 75% of the value of your home. In most cases this is adequate. If you are an exception, you must address this issue with your agent before a problem arises. Rare collections and antiques must be declared before an accident occurs.

The loss of home use is generally covered by your policy. If your home is unlivable due to smoke damage, your policy covers expenses of living elsewhere up to a limit. The limit is usually 20% of the value of your home.

The fourth type of protection in a homeowners policy is liability insurance. If someone is injured on your property, you are protected up to the limits of your policy. The amount of coverage is usually purchased to cover expenses up to $100,000; $300,000; $500,000; or $1,000,000. Check your policy and assess your levels of need.

• A Homeowners Policy provides coverage for contents, valuables, and liability for persons injured on your property. Check to make sure that the contents of your home and personal valuables are insured properly. Insurance coverage should be ample to replace objects lost and should provide fair cash values for jewelry and antiques. Fair cash value changes over time, and these changes need to be addressed.

Homeowners insurance, Renters insurance, and Condo insurance vary in coverage.

Get your insurance coverage from a reputable firm and an agent that comes highly recommended. Utilize your agent’s expertise to assess your needs.

COMMON MISTAKES INVOLVING COVERAGE

• Failure to report improvements/additions can void replacement cost of that structure.
• Replacement cost of the contents is important, not just cash value.
• Coverage for valuables such as antiques and jewelry is often deficient.
• Theft limits are often $1,000 to $3,000 which is not enough in most cases.
• A Home Business is usually excluded unless specially stated in the policy.
• Varying coverage exists for business items in a home or home business items lost while on a trip.
• Check your deductible before reporting a claim.

ITEMS NOT COVERED BY HOMEOWNERS POLICIES

• Damage from mold and termites is not covered.
• Back up of Sewers and Drains cause extensive damage. These are usually considered maintenance problems and are not covered. Another maintenance problem is water damage due to failing appliances such as a washer.
• Recreational vehicles (four wheelers, go carts, etc.) are not covered for liability when off the covered property.
• Bodily injuries occurring on the premises but related to a home business.

BE JUDICIOUS IN REPORTING CLAIMS

Reporting water damage to an insurance agency can result in the cancellation of a policy. Additionally, the insurance agency will send the information to a database in Alpharetta, Georgia, which is available to insurance agencies. Reporting of water damage may make it difficult to get coverage in the future.

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