There’s little doubt that your hard work and determination enabled you to be a homeowner. You’re proud of your house because it’s your home and part of taking good care of your home is by ensuring that it’s insured properly and insured with a sound insurance carrier. We invite the opportunity to work with you to better understand your risk and tailor proposals that best suit your current insurance needs. Although there are a fair number of additional coverages, we’ve outlined below the coverages that you initially see on the declaration page of your policy. The information below does not replace the language in your policy, but is meant to offer an undertanding of what each coverage is meant to address.
Dwelling Replacement Cost: Not to be confused with the tax commissioner’s assessed value or a real estate appraiser’s valuation, the replacement cost estimate is quite simply that. An estimate, base on factors such as square footage, construction materials, year of construction, and more, that is designed to determine how much it would cost to replace a structure in the event of a catastrophic loss.
Replacement Cost Coverage: This is the amount it would take to replace/rebuild a structure, based on current building material and labor costs.
Actual Cash Value Coverage: This is the amount it would take to replace/rebuild a structure, based on current building material and labor costs, less depreciation of the structure, which depends on the age and wear & tear of the structure.
Outbuildings: On most policies, 10% of the dwelling replacement cost is included to provide coverage for outbuildings. In the event that you have an outbuilding, which you believe would cost more than 10% of the dwelling replacement cost to replace, then you’ll need to specifically add that as a separate building.
Personal Property: This is designed to cover damages to your belongings both inside and around your home. The limit is typically 70% of the dwelling replacement cost, however, in most cases, this amount can be adjusted. Keep in mind that a number of items such as tools, guns, jewelry, china, collectibles, etc. are subject to a separate sublimit of coverage. If you have items value in excess of these sub limits then you’ll need to review with your agent and discuss individually scheduling those items.
Additional Living Expense: In the event you are displaced from your house, due to a covered loss, this coverage is to cover the incurred costs of temporary housing, while your house is repaired. This limit is typically 20% of the dwelling replacement cost.
Personal Liability: This comprehensive liability coverage helps protect you from demands and suits for property damage and/or bodily injuries, for which you are determined to be liable.
Medical Payments: More less a “good will” coverage for individuals who sustain an injury, while in your house or on your property. Regardless of legal liability, medical payment coverage is aimed to provide coverage for minor incidents that may occur, without regard for assigning fault.
Deductible: The amount of damage from a covered loss, which you will pay for. There have been quite a few important changes in this area. Some carriers have gone away from a dollar value deductible and moved customers to a percentage deductible. The percentage figure is taken from your dwelling replacement cost. Another development has been differing deductibles. At times you’ll see a separate “Wind and Hail” deductible, or a “Named Storm” deductible, which are typically higher than your “AOP” or All other peril deductible. It’s important to closely review your policy and speak with your agent about these matters.
Tree Debris Removal: This is aimed to provide some coverage to help pay for the costs incurred when a tree falls onto insured property. The incurred costs to cut up and remove trees, that fall in your yard without landing on your house or any other insured property, are typically not covered. It’s also worth mentioning that trees that are dead and/or leaning ominously towards your house or your neighbor’s house are the responsibility of the person who owns the tree.
Backup of Sewers and Drains: At times, water pressure can create reverse flow conditions, which result in “black water” or “drain water” from overflowing from a sink, tub, or toilet and flow into your house. A number of carriers specifically exclude damages from these losses, however, a growing number of insurance carriers offer protection from these costly incidents.