Recently, there was a fire at my friend’s home. She had multiple questions about her insurance, and I came to the realization that people could definitely use a course on home insurance. In the meantime, I wanted to do a small breakdown of standard coverages. Also, I wanted to let you know that you can request your declarations page from your current home insurance company to see a breakdown of your own insurance. Feel free to reach out with any questions you may have.
Dwelling:
This covers the home itself. The structure. For a standard home, this would be the walls, roof, insides of the home (carpet, flooring, additional fixtures, etc). When there is damage (due to a peril) this coverage will come in to help repair the home back to the way it was before. This is, of course, after the deductible, which will be listed on the declarations page. This can vary from $500 to even up to $10,000. Something you would want to be aware of, as that is what you would be paying when having a home insurance claim.
Other insurances:
These refer to other outside structures such as sheds and detached garages. Pool houses and other outside structures are written into this part of the building coverage.
Personal Property
This would be the property you own inside your home. Your belongings. Clothes, electronics, toys, furniture, and all other items within the home. I highly recommend that you take the time once a year to video your home. Open all the drawers, cupboards, and closets. Afterward, it can be uploaded to the cloud or stored in a place outside the home. When there is a fire or other peril that destroys your personal belongings, you can pull out that video for the insurance company. They pay people at the insurance company to go through these videos and itemize everything. They then will pay you back based on the value of these items. To maximize your coverage here, the video will play a huge role, and the insurance company finds it to be quite fair and reasonable.
We have always noticed that when someone has fire, they can’t remember everything they own. They get handed a sheet to fill out and given instructions to make a list of products that were owned in the home. This family typically puts four big screen TVs on the list, yet what about all the other little items they owned before the fire? The picture frames, the target purchases, hobby lobby décor, all of it. Don’t you want everything replaced? The only serious way to get these items replaced is to take photos, videos, and even consider keeping receipts.
Items of high value, gun collections, jewelry, antique paintings, along with other mostly family heirlooms and expensive items, should be on their own floater (or rider) with the policy. Otherwise, video and take photos of these items regardless for replacement in the future and discuss options with insurance on how to properly insure those items.
Loss of Use
This is the fund that helps you get set up to live somewhere else when something happens. They pay for you to live someone else while your home is being repaired. It can have limits, such as up to 12 months, and are subject to the deductible as much as the dwelling itself is. When having to stay at a hotel immediately, receipts must be saved, and request that the insurance company apply these payments to your insurance deductible.
Personal Liability
This coverage helps protect you in case something happens within your home to someone that is more severe. Something that medical payments to others might not help with (the other coverage people have with liability) and is standardly known as your legal protection. As medical payments to others are a per person total for each occurrence to pay medical bills for someone who was injured in your home. This can be $5,000, $10,000 or even higher depending on the coverage available to you with this insurance company. Personal liability on the other hand, usually comes in the form of $300,000 or 1 million. When wanting more liability, discuss whether an umbrella policy is right for you with your current agent.
You may qualify for discounts or choose a higher deductible to save money on your insurance premium (monthly or annual insurance bill). I find it important to review your coverage every few years, to see whether you are properly covered, for all your new personal property, or maybe that new additional structure to your home (shed or gazebo for example).
Should I do a more detailed course on home insurance? I feel like there is a lot more to say, yet this is just a standard blog post, with a few tricks and tips.
