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Understanding your home insurance coverage

Homeowners insurance provides financial protection in the event that your home or its contents are damaged. It also provides protection if you or a family member are held legally responsible (liable) for the injuries to others or damage to their property. It’s also required by most mortgage lenders.

There are different types of insurance policies that cover your home. They range from a basic policy, to those that will provide a much broader ranger of protection. Not all policies and coverages are available in all states.

What’s covered; what’s not
Most homeowners insurance policies will cover damage caused by such perils as fire, windstorms, hail, lightning, theft or vandalism. There are other homeowners policies that cover additional perils as well. Typically, floods and earthquakes are excluded. It’s important to talk to your agent or our representative to learn what your policy may and may not cover. For those perils that are not covered, there may be supplemental insurance you can purchase.

What most standard homeowners policies provide

  • Dwelling coverage. Pays to repair or rebuild your home – including electrical wiring, plumbing, and heating and air conditioning – if damaged by a covered cause of loss. It’s important to buy enough dwelling coverage to cover the cost to rebuild. Learn more about cost to rebuild.
  • Other structures coverage. Pays for damages to detached structures like garages, sheds, fences and cottages on your property.
  • Personal property coverage. Reimburses you for the personal items in your home that may be damaged or destroyed by a covered cause of loss, which could include your furniture, clothes, sporting goods and electronics. Learn more about personal property insurance.
  • Loss of use coverage. Pays your additional housing and living expenses if you must move out of your home temporarily while it’s being restored. Learn more about our loss of use insurance.
  • Liability insurance. Helps protect your assets and cover your defense costs in the event of a lawsuit because you or your family members are responsible for causing injuries or damage to other people or their property. Learn more about our liability insurance.
  • Additional home coverages. There are a number of additional coverages you can add on to your homeowners policy to help you meet your insurance needs. Learn more about our optional home coverages.

Your home is one of your most valuable assets. Make sure you have enough dwelling coverage on your homeowners insurance policy to rebuild it to its original state if it’s destroyed by fire or other covered cause of loss. And while the current market value of your home may be lower than you’d like, the cost to rebuild may be higher than you think.
 Cost to rebuild
The cost to rebuild your home is based on a number of factors and can often be higher than the potential selling price of your home. That’s because the price of building materials may have increased over the past few years while the value of real estate has generally decreased.

 Key factors that impact the cost to rebuild your home include:

  • Total living area (square footage of home)
  • Style of home (e.g. ranch, contemporary, colonial)
  • Exterior wall construction (e.g. frame, brick)
  • Number of kitchens and bathrooms and quality of materials
  • Garage type (e.g. attached, detached, built-in)
  • Special features (e.g. fireplaces, porches, skylights)
  • Additions or enhancements (e.g. finished basements; in-law apartment)

Why rebuild costs can differ
Costs to rebuild your home often differ from home market values, mortgage requirements, tax assessments and real estate appraisals. This is due to a number of factors:

  • Costs for many raw materials that are needed to make repairs or to rebuild have increased in recent years, in some cases very significantly.
  • Specialized workers are often needed, in the event of a loss, to prevent further damage to your property.
  • Building codes may have changed since your home was built.

Make sure you have the right coverage
Updates, additions and improvements to your home may increase the amount of coverage you need. The most common changes that could increase the amount of coverage you need include: Installing hardwood floors, updating a kitchen or bath or adding a deck.

Here are some easy ways to keep your coverage current:

  • Review your coverage each year to be sure it reflects the cost to rebuild.
  • Inform your agent or our representative of any home improvements or remodeling projects you’ve completed in the past year.
  • Consider that even small home improvements can affect the cost to rebuild your house.

Be confident in your insurance choices. Contact your agent or our representative today. We’ll work with you to develop a homeowners insurance policy that fits your needs and your budget.

Homeowners insurance can cover more than your home
When your home gets damaged, so can your personal items. Our homeowners policies provide coverage that can compensate you for these items in the event of a covered loss. This part of your policy can also cover your belongings anywhere in the world. Personal property coverage included in your our homeowners policy
settles covered personal property losses based on the actual cash value of items such as furniture, clothing and electronic appliances, unless it costs less to repair that item instead. In most states, actual cash value means the cost to replace the damaged item less depreciation. Replacement cost option offers an optional coverage that settles covered personal property losses on the replacement cost of the damaged items – with no deduction for depreciation. When purchasing your homeowner policy, you’ll need to decide whether you want the standard coverage for the actual cash value of your belongings, or the optional replacement cost coverage. Both are subject to the policy limits and deductibles that apply. Specialized endorsements available
Some examples of classes of property that have specialized limits of coverage for some or all claim types:

  • Money or related property, coins and precious metals other than tableware
  • Watercraft, including trailers and equipment
  • Jewelry, watches, furs and semi-precious stones
  • Silverware, goldware or pewterware

These types of property can be insured for their full value with our using specialized endorsements or separate policies. For example, you can expand coverage for business property using the our’ home business coverage endorsement (in some states). You can insure jewelry, furs, silverware and other treasured possessions on a valuable items endorsement or on a personal articles floater policy.

If your property is damaged in a flood or earthquake, however, it’s typically not covered. Certain other types of possessions have limited coverage and some are specifically excluded from property coverage because of their nature or because they are generally covered by other types of policies.

Know what your possessions are worth with a home property inventory
It’s important to keep an up-to-date inventory of your personal possessions. Your inventory should include a brief description of the serial and model number, and the cost. It can also include photographs or videotapes of the items. Be sure to attach any receipts that you have for the items to your inventory and to keep your inventory in a safe place such as a fireproof security box or safe, blank safety deposit box, or with a trusted member or friend.

Be confident in your insurance choices. We’ll work with you to develop a homeowners insurance policy that fits your needs and your budget.

Loss of use coverage for additional living expenses
If damage to your home is covered by your policy, and you have to leave it during repairs, where would you stay? Would the cost of a hotel or temporary apartment fit into your budget? Not to worry. A our homeowners policy can help cover you.our Loss of Use coverage pays for the additional costs you incur for reasonable housing and living expenses if a covered event makes your house temporarily uninhabitable while it’s being repaired or rebuilt. Speak with an agent or our representative to understand how much loss of use coverage is available to you under your policy. Be confident in your insurance choices. We’ll work with you to develop a homeowners insurance policy that fits your needs and your budget.
Protect yourself with liability insurance
Liability insurance is about financial protection – for you and your family. The personal liability coverage within your homeowners policy provides coverage for bodily injury and property damage sustained by others for which you or your family members are legally responsible. For example, someone falls down your stairs, or your child accidentally throws a ball through a neighbor’s window, breaking an expensive Chinese vase – you may be held responsible for the damages caused. Under personal liability coverage, the insurance company defends you if you are sued, and pays damages to the injured person up to the limit of liability.Most homeowners policies provide a minimum of $100,000 in personal liability coverage, meaning the insurance company will pay up to the amount in total to injured persons per accident. If you feel you need more protection, you can increase this amount up to $500,000. You can also purchase a personal liability umbrella policy if you think you need more than $500,000 in liability coverage.
Medical payments
Liability insurance also includes Medical Payments to Others coverage. The homeowners policy provides for the payment of necessary medical expenses for guests who are accidentally injured on your property. This is regardless whether or not you are legally responsible. There is also coverage in some situations when the accident happens off your property. You can talk to your agent or our representative to get a fuller understanding of what is covered or not. The minimum amount of coverage available is $1,000 per person. Higher amounts of coverage are also available.
Liability coverage exclusions
A homeowners policy does not cover all situations for which you or a family member may be legally responsible for causing bodily injury or property damage.There are many exclusions in the policy and many of them have exceptions. It’s important that you read your policy to learn what is covered and not covered. You can also talk to your agent or our representative to get a fuller understanding of what is covered or not.Be confident in your insurance choices. We’ll work with you to develop a homeowners insurance policy that fits your needs and your budget.

We understand that one size does not fit all when it comes to insurance. That’s why we offer optional coverages (endorsements) that you can add on to your basic homeowners policy. Some of the more common add-on coverages include:

  • Special coverage for contents. Provides broader protection for your possessions; your personal property is covered in more situations than the basic policy.
  • Contents replacement cost coverage. Pays the replacement value on property damaged by a covered loss – with no deduction for depreciation – subject to your policy limits and deductibles. Special limits apply to certain items such as jewelry, watches and furs.
  • Additional replacement cost coverage. If the limit of insurance on your home is too low to cover a total loss, this coverage makes available an additional amount to help rebuild your home.
  • Valuable Items Plus. Provides higher limits and expanded protection for special classes of property such as jewelry, silverware, fine art, furs, cameras, musical instruments, and home computers.
  • Personal articles floater. Should you need even higher amounts of coverage than that offered by the Valuable Items Plus endorsement, this separate valuable items policy is also available.
  • Coverage for water back-up. Provides coverage up to a specific dollar amount if water backs up through your sewer or drain, or if water overflows or is discharged from your sump pump.
  • Identity fraud coverage. Provides up to $25,000 to help cover costs to restore your identity if it’s used fraudulently.
  • Green home coverage. Additional protection to an existing our policy that will help repair, replace or rebuild with green materials, after a covered loss occurs.

Keep in mind that damage caused by floods is not covered by homeowner insurance.

Let us give you guidance on what optional coverages might best meet your needs and your budget.

Some ways to manage the cost of homeowners insurance
Insurance companies determine what you’ll pay for home insurance based on a number of factors. As a homeowner, some of these factors are not under your control. For instance, the cost of building materials, labor and extreme weather events. But you can control some others. Read on to see what you can do to save money:

Money saving discounts offer many ways to save on home insurance:

  • Multi-Policy Discount. You can save up to 15 percent on home insurance when you have more than one policy with our − homeowners, auto, umbrella, boat, personal articles floater.
  • Home Buyer Discount. Available to customers who have purchased their home within the prior 12 months to the policy effective date.
  • Loss-Free Discount. Offered to eligible customers who have not experienced a loss within a specified time period.
  • Protective Device Discounts. Provide a variety of ways to save by having devices such as:
    • Smoke detectors and alarms
    • Interior sprinkler systems
    • Home security systems such as deadbolts, alarms and 24-hour security guard
    • Smart or connected home technology which alerts the customer that a fire or burglar event is occurring
  • Green Home Discount. Save up to 5 percent if your home is certified ‘green’ by the Leadership Energy and Environmental Design (LEED) organization