HOME INSURANCE

In Schererville, Indiana and Illinois, Home insurance policies are complex written arrangements made to protect the property against unexpected damages. It is often undervalued by most homeowners.  And most homeowners think that each insurer’s home policy is the same at each insurance company.  

Guess what — it may not be the same.   Just because you are matching the numbers on Coverage A, B, C, D does not mean that it is apples-to-apples coverage.   

There are many types of homeowner’s insurance policies and all with different coverages – Actual Cash Value Policy, Replacement Coverage, Guaranteed Replacement Coverage, Named Perils, All Perils (Open Perils) except for exclusions.

Homeowners insurance should be considered the most important investment when owning a home.

Wouldn’t it be terrible to pay for a homeowner’s insurance policy, have a claim, then find out that you do not have the coverage you thought you had?  All this because either your agent did not explain your coverages to you OR you were just shopping based on the price?  

Recently, I was speaking to a prospective customer and they were upset because when they made a claim on their policy with one of our competitors, they did not realize that the 1% deductible that was given on this policy was an amount based on the insured value of the home. 

The customer thought that it would be 1% of the damage amount from the claim.  The customer had a $20,000 claim and thought their deductible would be $200 and found out that the deductible was $5,500 because his home was insured for $550,000.  However, at the time he shopped for insurance all he may have been concerned was to save a couple hundred dollars a year from his current annual homeowner’s insurance premium. 

Do you really know what’s covered under your policy?

No one knows when a fire can damage a house or a tornado can hit a community, nor know if your power will be out for 12 hours and the sump pump backed up.  But, if you want coverage on your claim, you should question what your homeowner’s policy actually covers.  It can be challenging to choose the best insurance coverage. 

But, these are some of things you have to scrutinize when several policies or quotes are given to you.

Understanding a covered property

Each insurance policy is unique. Sometimes it is tricky to compare and contrast one policy to the other.  But it is important to understand the type of covered property.  Basically, a covered property is divided into four categories - dwelling, other structures, personal property, and loss of use.

Dwelling coverage

When a home insurance coverage says it only covers the dwelling, it means that the house structure where you live is the only part covered by the insurance. If you are not living there and your home is vacant, you may not have coverage or could have limited coverage.  Did you read your policy when you received it? 

Other Structure Coverage

If your homeowner’s policy states that it covers the dwelling and other structures, it means that both the house structure where you live and the other properties within the property like a tool shed, detached garage, driveway, swimming pool, gazebo, pergola, fence, light post, or any non-attached structure, are covered by the policy.

Personal Property Coverage

The personal property coverage on your homeowner’s policy covers any items in the home, like your furniture, appliances, and other belongings. For example, if you turned your house upside down, everything that fell out of the house would be your personal property; plates, cups, laundry detergent, clothes, tv, etc...  The personal property coverage goes into effect when a covered peril of the policy takes place and you have made your claim minus your deductible.  Ask your agent if your personal property is replaced at actual cash value, which means the cost to replace minus depreciation, OR is coverage based on replacement cost, which means that they will replace the item for the current cost to replace.  They will holdback depreciation, but once you actually replace the item you receive the amount held back. 

Did you know though that certain personal property items have limits in your policy and it does not matter how much it costs to replace?  The item is only covered up to a certain limit.  For example, money, jewelry, firearms, instruments, furs, cameras, computers, etc...  Each company has limits in their policies for these items or others.  It is important to understand those limits.  So if you did not schedule your jewelry and you own $10,000 worth, your policy may only cover up to $2500 and not payout more than $750 for any single item.

Loss of Use or Additional Living Expenses

If your home becomes uninhabitable because of a covered peril, the insurer will reimburse additional living expenses of the homeowner.  Remember you still pay your mortgage and regular normal living expenses, but the insurance company pays the additional expenses it is costing you to live elsewhere during the covered claim repair or settlement.

Check the types of perils covered

Your policy could be “Named Perils” or “All Perils” or “Open Perils” or "Comprehensive Perils" except for the exclusions.    A peril is the cause of loss such as Flood, tornado, fire, theft, water, etc...   Most insurance companies provide a detailed description of these perils inside your policy documents. 

Named perils coverage means the policy is only going to cover for the perils listed in the policy documents.  If the insurance has “named perils” only, it will limit your policy to what is covered in your claim.  Some policies do not cover theft, some do not cover wind, and some do not cover back up of sewer, drains, or sump pump, etc..    Wouldn’t you hate to find out in a claim that you did not have coverage because you only had a named peril policy?

To maximize your homeowners insurance, always get the homeowner policy with a "comprehensive perils",  “open perils” or “all perils” coverage. This means that all perils are covered by the insurance except for those that are excluded in the policy, like flood, earthquake, or sewer sump pump.

Additional Endorsements

Your homeowner’s policy can have additional endorsements that can be added onto the policy or you could increase to higher coverages for certain losses and/or replacements.  You might be able to upgrade inexpensively to a higher package. 

For example:

A customer was comparing a quote we gave through Erie Insurance versus a quote they received from Allstate.  I asked the customer, what package is Allstate quoting?  They have 3 packages, their Base package, Gold package, and Platinum package.  The customer was not comparing apples for apples.  When the customer called Allstate back, they found out they were offering the Base package.  Well I was quoting the Advantage Plus endorsement.  

The difference, Erie was offering Guaranteed Replacement Cost Coverage on the dwelling.  This meant that no matter how much it might cost to rebuild the home, the cost would be paid in full.  The Allstate package was only covering to the limit on the policy.  As well as jewelry on the Erie policy was covered up to $5000 where it was only covered up to $1200 on the other package being quoted. 

Also, additional living expense coverage or loss of use coverage had a significant difference.  Erie covered up to 24 months of additional expenses without a monetary limit and Allstate only covered up to 12 months with a dollar limit.  I had included sewer sump back up coverage, their quote did not include that endorsement as well as many other differences. 

The moral of the story is, make sure you are truly understanding your quote because you may not be getting what you think you are getting.  That is why, Hoosier Insurance Agency makes sure to review your coverages with you.

Another important endorsement is matching roof and siding.  Many insurance companies are only paying for the repairs of the roof to the actual damage ONLY and will not match.  So it is possible that only half of your roof is going to be replaced.  Do you want the front and back of your home or a section of your home to have different colors of shingles or siding? 

Some other additional endorsements you may need are scheduled items, sewer-sump back-up and overflow, farm use, home business, horse coverage, extra liability coverage, sinkhole, earthquake, etc...  Ask the agent, what other endorsements or options are available?

Final words

Typically, you get what you pay for.  If you are looking for cheap insurance, you are probably getting inferior coverage.  If you are looking to save $100 - $200 a year, make sure you are at least getting the same coverage you have or better; because saving that couple hundred dollars a year is not worth having a claim not covered.  Be aware of your coverage and make sure you have an agent that cares and actually reviews and explains your homeowner policy coverage to you.

 

 

Located in Schererville, Indiana. We also serve the Crown Point, Dyer, Griffith, Merrillville, and St. John areas. - Licensed in Illinois, Indiana and Wisconsin