Homeowner’s Insurance: What You Need To Know

Buying a policy that fits your needs is important because replacing your home in the event of damage or destruction can be costly. If you have a mortgage, insurance coverage is not optional.


Kinds of homeowner’s insurance
There are three types of insurance for homeowners. Speak with a reputable insurance professional about what works best for you.

Extended replacement value policies cover the cost of rebuilding or repairing a damaged home, even if it’s more than the policy value. This type of policy is recommended by most insurance experts because it covers the full cost of rebuilding the house regardless of actual market value and depreciation. A policy that covers just the mortgage will pay perhaps 90% of your loss.

Actual cash value policies will cover your house and possessions but deduct depreciation. The insurer will pay for the current value of your property, not what you paid for it.

Replacement cost policies will cover the actual cost to replace everything. Depreciation is not factored in, which means that everything being replaced or rebuilt is covered at market value.

What’s covered under your homeowner’s policy
Policies can be customized a bazillion ways, but generally, coverage includes damage from fire, vandalism, theft, and hurricanes. Acts of God, including flooding and earthquakes, are not typically covered; however the consumer can purchase a rider, or insurance endorsement.  A rider amends the terms of a policy and can add to (or restrict or limit) the terms of your insurance coverage.

Personal possessions like clothing, furniture, and appliances are covered and will be replaced at the actual cost. The purchase of a rider may be necessary to insure unusually expensive items like jewelry or fine art. Your policy will cover treatment costs if someone is injured on your property. Off-premises coverage is also available, in case you lose a piece of jewelry, whether it happens in Paris or at the park down the street. Picture it if you will: While playing baseball in your backyard, your child hits a fly ball that destroys your neighbor’s plate glass window. As Bob walks toward your gate he steps in a pothole, breaks his ankle, then falls face first into the gate. Your unconscious neighbor is then attacked by your nasty little lapdog. Bob is having a bad day, but there is good news! Your homeowner’s insurance will pay to replace the window plus all the treatment your unconscious, bleeding, broken neighbor needs for his injuries, as well as his ambulance ride.

More bang for your buck
Added protection can be had by purchasing an umbrella insurance policy. The premium may be a few hundred dollars more, but the peace of mind that it brings is priceless. Your own property is not covered by umbrella insurance, which is a liability policy. If you are sued and found liable for damages the policy will cover that expense partially, if not in full, thus protecting your personal assets. Any exclusions will be listed in your policy. Some breeds of dogs are not covered by liability insurance.

Policy pricing depends on several factors including the home’s construction, both age and materials; heating and electrical systems, type of roof, security and safety systems; and proximity to bodies of water. A poorly maintained house will cost you more if you can insure it at all, and damage due to poor maintenance won’t be covered. Even if you’ve just purchased your home, any claims made by previous owners can count against you.

The takeaway
Work with your mortgage lender and with your insurance agent to determine your needs. Seek recommendations for insurers, either online or word of mouth. A slightly higher premium is probably wiser if your assets are protected by a better policy

Consult a local, trusted agency
The Secky Insurance Agency, located in Plainville MA, near North Attleboro will provide quotes from several national carriers. As a multi line, multi carrier agent, let Secky Insurance do the shopping for you, to get the best policy at the best price. 

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