Home Insurance Coverage Basics
In it’s simplicity your Oregon home insurance policy will save you from:
Severe financial loss if your home is damaged or destroyed.
Damage and loss to your family’s possessions.
Financial loss due to liability claims, medical expenses, and other amounts that result from property damage and personal injury suffered by others.
The six basic coverage’s of a home insurance policy are:
Fire and lightning
Windstorm and hail
Theft, vandalism, and malicious mischief
Riot and civil unrest
Damage from vehicles
Sudden, accidental damage from smoke
Aircraft and objects falling from the sky
Weight of snow, ice, and sleet
Accidental discharge or overflow of water or steam from your plumbing
Freezing of plumbing
Sudden, accidental tearing, cracking, burning or bulging of a steam pipe or hot water heating system
Sudden and accidental damage from artificially generated electrical current
A home insurance policy will exclude a loss due to flood, earthquake, and landslide. Flood insurance is available through the federal government’s National Flood Insurance Program, for an additional premium earthquake insurance and landslide insurance are available as additional coverage options if your home qualifies.
There are two types of replacement for your home.
- Guaranteed Replacement Cost. With this type of coverage, once you’ve met your deductible, the insurer promises to pick up the cost for rebuilding your home regardless of what the cost is to rebuild the home. If your home is insured for $200,000 and it ends up costing $275,000 the company will rebuild it without carrying any of that cost over to the you. Most companies have eliminated this type of coverage.
- Extended Replacement Cost. This is designed to cover rebuilding your home based on the declared value on your policy with an additional 25% – 50% cushion to protect you if there is an increase in labor and building materials.
Home insurance will protect more than just the owner of the house. Generally, it will protect anyone named on the policy, your spouse, residents of the home (other than renters), household employees, guests and visitors.
Property used for business purpose isn’t considered personal property and limited coverage is provided. If you have more than $5,000 in property that’s used for business purposes please let me know so I can provide you with a commercial insurance quote to provide coverage for your business property.
There are often limitations with property coverage and some property might not have full replacement cost coverage. Adding a schedule will insure your property on a scheduled basis, this means that each item is listed and described on your policy. This will provide a separate limit of insurance for each, based on an appraisal or bill of sale.
The types of property for which this coverage is used is jewelry, furs, cameras and photographic equipment, musical instruments and equipment, silverware, golf equipment, stamp and coin collections, and fine arts.
With a schedule there are:
No limitations or exclusions as the schedule will cover any type of loss other than wear and tear.
There is no deductible to pay when you file a claim with a scheduled piece of property.
An inventory of your personal belongings is a good idea. When you have to file a claim it is to your advantage when you have documentation to prove your losses. When creating this inventory provide the serial number, date, cost of purchase and include receipts if possible. An easy way to inventory your possessions is to use a video camera or take digital photos and forward those pictures to a web based email account so you can access them anywhere.
You can create a home inventory by downloading this personal organizer.
Why create a personal organizer?
Remembering all the contents of your house and garage after a fire, theft, or other calamity is practically impossible. That’s what you’ll be asked to do when you submit a claim on your homeowner’s insurance, unless you previously prepared a written inventory of your household possessions and property. Considering that the whole point of buying homeowner’s insurance is to obtain compensation for financial loss, why bet the farm (or your house and its contents) on your memory, or add to the emotional loss and stress which comes from any type of loss?
An example of how this coverage works would be if your mortgage is $1,500 per month, you suffer a loss and it costs you $3,000 to stay in a hotel for a month you would be reimbursed for the difference in your living expenses. Also if you needed to board a pet in a kennel and eat out at restaurants this is the coverage that pays for expenses beyond what you’d normally pay for daily living.
For example, you may be found negligent if a postal worker was injured by falling off your tricky front stairs because the railing was broken (and you knew about the situation but failed to repair it). You may also be found liable for intentional misconduct if you cut down a tree on your neighbor’s property to improve your view.
There is no deductible with liability claims.
Medical payments to others does not apply to injuries of named insureds or any regular resident of the household. Medical payments to others is a good will payment in the hopes of preventing a larger lawsuit down the road as the payment should not be construed as admitting liability.
As an insurance broker I help individuals throughout Oregon and the Pacific Northwest manage risk.