For homeowners, insurance protection is an important aspect of homeownership.  Buying homeowners insurance, sometimes also called home insurance, means buying protection for your home - both inside and out.

What is Home Insurance?

Home insurance compensates you for losses to your home and possessions inside it, so purchasing a homeowners policy provides added security for your investment.  Home insurance also protects you if you're legally liable for someone's injuries on your property, as well as from financial losses caused by storms, fire, theft and other events outlined in your policy.

Different companies offer different home coverages, so choosing the right policy means finding the right mix of coverage to meet your needs.  This is what we try to do for you as independent agents.

Generally a standard homeowners policy protects the following:

• the physical structure of your home

• structures on your property (storage sheds, pools, boathouses, etc..)

• your personal property and belongings inside your home, up to specified limits

• your liability or legal responsibility for any injuries and property damage you or your family members cause to other people

• injuries to your household pets while inside your home

• additional living expenses if a fire or other insured disaster leave you temporarily unable to live in your home.

It should be noted that standard homeowners policies do not include earthquake or flood coverage, although both can be added on for an additional premium.

Often, for an additional fee, you can select optional homeowners insurance coverages, including:

• higher limits of liability for property damage or bodily injury

• replacement cost for personal property protection for valuables (jewelry, watches, furs, firearms, collectibles, etc...)

• Additional coverage for electronics or computer equipment

To make shopping for the right homeowners price easier, take an inventory of what you own to decide what amount of personal property coverage makes you comfortable.  We will run a a Replacement Cost estimator on your home, to help you decide on a suitable limit to insure your home for.

What About Townhouses?

if you own a townhouse, you can insure it with a home insurance policy or an association master policy, depending on your situation.  Some townhouse associations have master policies, in which case you should purchase a tenant homeowners policy to insure your personal property.  Other townhouse associations do not have master policies, which is when you should purchase a home insurance policy for your unit.  Check with your association to determine which type of policy you should purchase for your townhouse.

Types of Home Insurance Policies

Homeowners can purchase three different types of policies:

• HO1 - protecting property and 11 basic perils

• HO2 - protecting property and 18 perils (including the 11 of an HO1)

• HO3 - Protects against most perils, including some not covered by an HO2

What Home Insurance Covers - And What It Doesn't

What it Covers

Standard homeowners policies provide the following types of coverage, up to the limits outlined in the policies:

Dwelling - pays for damage or destruction to your house and any unattached structures and buildings, such as fences, detached garages, and storage sheds.

Personal Property - covers the contents of your house, including furniture, clothing and appliances, if they are stolen, damaged or destroyed.

Liability - protects you against financial loss if you are sued and found legally responsible for someone else's injury or property damage.

Medical Payments - covers medical bills for people hurt on your property.  Medical payments coverage also pays for some injuries that may happen away from your home, such as if your dog bites someone.

Loss of Use - pays for additional living expenses if your home is too damaged to live in during repairs.  Most standard home insurance policies pay 20-30% of your dwelling coverage.

You may also be able to purchase the following optional home insurance coverage:

Guaranteed Replacement Cost - provides the most complete coverage for your home.  Your insurance company requires you to meet specific underwriting rules and conditions to qualify for this coverage.  For instance, you may need to increase your home insurance amount on a monthly, quarterly or even yearly basis to keep up with the inflation rate.

Scheduled Personal Property Endorsement - also called a Personal Article Floater.  With this coverage, possessions, including jewelry, furs, stamps, coins, guns, computers, antiques, etc... are covered.  Each article is itemized and detailed in the floater, and excluded perils are also outlined.  Personal Article Floaters often do not have deductibles.

Increased Limits on Money & Securities - increases coverage amounts for money, bank notes, securities, deeds and more.

Secondary Residence Premises Endorsement - Covers a secondary residence, such as a summer home or condo.  Insurance for secondary homes is not automatically provided by the home insurance policy for your primary residence, so it's important to consider this endorsement if you own more than one home.

Watercraft Endorsement - expands your personal liability and medical payments coverage for small sailboats and outboard motor boats only. 

Theft Coverage Protection Endorsement - if items from your motor vehicle, trailer or watercraft are stolen, theft coverage protection broadens theft coverage without requiring proof of forcible entry.

Credit Card Forgery and Depositors Forgery Coverage Endorsement - coverage applies if your credit cards are lost, stolen or used without permission, or if someone forges a check, draft, promissory note, etc.  Certain restrictions apply and are noted in your home insurance policy.

What Home Insurance Doesn't Cover

A standard homeowners policy may not protect you from:

• Flood

• Earthquake

• Nuclear Accident

• War

• Windstorm Damage - in certain areas, mostly costal, of some states, standard home insurance policies do not cover damage caused by windstorms or hail.

Questions to Ask Before You Buy Home Insurance

Is flood insurance required and what kind of flood insurance is available?

If you life in a "high-risk" flood zone and you have a mortgage you may be required to have flood insurance.  Depending on where your home is located, you may qualify for flood insurance through the National Flood Insurance Program.  Keep in mind that your home could sustain flood damage by other means, such as broken pipes, even if you're not in a "high-risk" zone, so consider the coverage if it's available to you.

Is Earthquake Insurance available?

Most insurance companies offer earthquake insurance for an additional cost.  This insurance is generally attached to your home insurance policy as an endorsement.

Home Much Insurance Do You Need?

You generally have three options to choose from when deciding how much home insurance you need, and each of these options provides a different level of coverage for your home:

Actual Cash Value - pays for the cost to replace damaged property while factoring in depreciation amounts.  This valuation may not always be available with all companies.

Replacement Cost - pays for the cost to replace damaged property without factoring in deductions for depreciation, but payment is limited to a maximum dollar amount.  More and more insurers are requiring homes they insure to be insured to 100% of the replacement cost.

Guaranteed Replacement Cost - pays the full cost of replacing damaged property, with no deduction for depreciation and no dollar limit.  This coverage is not available with all companies in all states.  Many companies will cap the "guarantee" to 120% the cost to replace your home.  Allowing for this amount protects you in cases of increased construction costs or other building-related fees due to inflation.

We have detailed estimation tools to help us determine the Replacement Cost of your home.

Frequently Asked Questions about Home Insurance

What factors can affect home insurance premiums?

The following can affect your premium:

• Home features & characteristics - your home's age, type of structure, size, construction, wiring, roof, garage, etc... can affect your premium.  Older homes often cost more to insure and those costs can differ whether your home is brick, frame, stone or has synthetic siding.

• Location - where your home is located can change your premium.  For instance, your home rate can be affected if your home is within a few miles of a fire station; is exposed to extreme weather, such as hurricanes, tornados or earthquakes; or is in a neighborhood more prone to theft.

• Protective Devices - burglar alarm systems, smoke detectors, fire extinguishers, sprinkler systems and deadbolt locks can lower your premium.

• Personal Factors - what you do can affect your home insurance premium too.  For instance, smokers may pay more for home insurance than non-smokers.  A good credit history can also lower what you pay for coverage.

• Claims History - if you have a history of claims on your home policy, you may pay a higher premium.

Am I required to have home insurance if I own a home?

Unlike driving a car, you can legally own a home without home insurance.  However, if you finance your home with a mortgage, your lender is most likely going to require you to have coverage.

If you live in an area that is prone to flooding or earthquakes, your lender may also require you to purchase those coverages as well.

If you purchase a condominium or co-op, your board may require you to buy condominium insurance.  Be sure to check with your board to see what type of policy is required.

After you pay off your mortgage, you aren't required to have home insurance.  However you should keep your policy active to avoid risking what you've invested in your home.

Why should I complete a home inventory?

When you purchase a home, and even annually thereafter, you should create an up-to-date home inventory to expedite a claim settlement if you ever need to make one.  With a complete home inventory, your insurance company can verify property easier, which makes settling a claim easier.  Plus you can easily verify losses for your income tax return with a home inventory.

How do I complete a home inventory?

Start your list by writing down possession, describing each item and noting the make, model and where each item was purchased.  Include sales receipts, purchase contracts and appraisals if you have them, too.  If you're handy with a spreadsheet program such as Microsoft Excel, this would be an excellent list to put on a spreadsheet.  Organize clothing into categories for easier reference.

A few inventory organization tips:

• Remember to list big-ticket items like jewelry, artwork and collectibles

• Take pictures or video if possible.  Record a walkthrough of your home and describe the contents as you pan over them.

• If you're storing your inventory in an electronic format - spreadsheet, digital photos or video - then backup your data on a separate disk or drive, or even online.

• Keep hard copies of your inventory list and documents in a safe deposit box.

What's the difference between cancelling and non-renewing a home insurance policy?

Cancelling a home policy and choosing not to renew are two very different actions an insurance company can take.  Typically companies only cancel an active policy if one or all of the following occurred:

• the policy has been in force less than 60 days

• you fail to pay the premium

• you commit fraud or made serious misrepresentations on the application

Non-renewing a policy is a decision that you or your company can make to discontinue coverage at the end of a policy term.  Depending on your state, if your insurance company chooses to non-renew your policy, they must notify you and provide an explanation within a specified time period.  You can contact your company's consumer affairs division if you disagree with the reason or want further explanation.

What parts make up a homeowners policy?

Although policies differ in their actual structure, most contain the same basic components:

Declarations Page(s) - usually the first page or couple of pages of your policy, it contains summary information such as name, address, dollar amounts of the coverage in the policy, description of the insured property, name of the company providing coverage and the contact information.

Definitions - explain the meaning of the terms as used in the policy.

Coverage - details the extent of protection for both property (house, structures, contents) and liability (bodily injury or property damage to others for which you are liable) in your policy.

Exclusions - explanations of what is not covered by your policy, under both property and liability coverage.

Conditions - outline the responsibilities of both the insured and the insurance company under the policy.  Your duties in the event of a loss and also the procedures the company will follow to settle any losses are detailed here.

Endorsements - riders, amendments, or attachment that alter the standard coverage provided by the policy.  Many endorsements carry an additional charge for them.