We often hear questions such as, “Why would I want to insure my house for $240,000 if it’s only worth $120,000, according to my property taxes?” The reason is that when you buy homeowners insurance you’re not insuring the market value of your home. You’re protecting yourself against financial loss if catastrophe would occur. Would it cost more than $120,000 to rebuild your home from scratch? The answer is usually yes.
That’s why it’s important to insure your home at the level it would cost to replace it—not its market value. Although it might seem like you’d save money if you insured your home for its market value, you could end up worse financially if disaster hits.
It might seem strange to think about. People are inclined to think in terms of value—how much is your car worth? How much did you spend on that coat? But when it comes to insuring your home, the current market value isn’t necessarily the most important aspect. Keeping yourself protected from financial disaster is.
As an Erie Insurance agency, we help figure out what coverage is right for you, depending on certain variables including location and recent improvements you’ve made to your home. Give us a call at (585) 394-2790 (Canandaigua) or (585) 235-4910 (Brighton).
At the J. James Wolfe Agency, we recognize that your home is your most important investment. Depending on where you live – a house, apartment, or condominium – the right home insurance policy can provide you peace of mind as well as the money you need to repair or replace your home and/or belongings if the unexpected happens. You can rely on us as the areas Home Insurance Experts.
The staff at the Wolfe Insurance understands that Homeowners Insurance is complex and confusing. Our client service team is standing by to assist you with any questions you may have. As an Independent Insurance Agency, we have the unique ability to provide you with the optimal insurance coverage with unbeatable rates. We can help you maximize your insurance protection while optimizing your budget.
When you're ready to enjoy the comfortable, trustworthy service of the area's largest independently owned Insurance Agency, we're here for you. After all, we live here and have enjoyed insuring our client's homes since 1974. Contact us today. Better yet, stop in to one of our two locations and meet us.
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What Is Covered by a Standard Homeowners Policy?
A standard homeowner’s insurance policy includes four essential types of coverage. They include:
1.Coverage for the structure of your home.
2.Coverage for your personal belongings.
4.Additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster.
1. THE STRUCTURE OF YOUR HOUSE
This part of your policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disaster listed in your policy. It will not pay for damage caused by a flood, earthquake or routine wear and tear. When purchasing coverage for the structure of your home, it is important to buy enough to rebuild your home.
Most standard policies also cover structures that are detached from your home such as a garage, tool shed or gazebo. Generally, these structures are covered for about 10% of the amount of insurance you have on the structure of your home. If you need more coverage, talk talk with our staff about purchasing more insurance.
2. YOUR PERSONAL BELONGINGS
Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disaster. Most companies provide coverage for 50% to 70% of the amount of insurance you have on the structure of your home. So if you have $100,000 worth of insurance on the structure of your home, you would have between $50,000 to $70,000 worth of coverage for your belongings. The best way to determine if this is enough coverage is to conduct a home inventory.
This part of your policy includes off-premises coverage. This means that your belongings are covered anywhere in the world, unless you have decided against off-premises coverage. Some companies limit the amount to 10% of the amount of insurance you have for your possessions. You have up to $500 of coverage for unauthorized use of your credit cards.
Expensive items like jewelry, furs and silverware are covered, but there are usually dollar limits if they are stolen. Generally, you are covered for between $1,000 to $2,000 for all of your jewelry and furs. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for its appraised value. Coverage includes “accidental disappearance,” meaning coverage if you simply lose that item. And there is no deductible.
Trees, plants and shrubs are also covered under standard homeowners insurance. Generally you are covered for 5% of the insurance on the house—up to about $500 per item. Perils covered are theft, fire, lightning, explosion, vandalism, riot and even falling aircraft. They are not covered for damage by wind or disease.
3. LIABILITY PROTECTION
Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. So, if your son, daughter or dog accidentally ruins your neighbor’s expensive rug, you are covered. However, if they destroy your rug, you are not covered.
The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit of your policy. You are also covered not just in your home, but anywhere in the world.
Liability limits generally start at about $100,000. However, experts recommend that you purchase at least $300,000 worth of protection. Some people feel more comfortable with even more coverage. You can purchase an umbrella or excess liability policy which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits. Generally, umbrella policies cost between $200 to $350 for $1 million of additional liability protection.
Your policy also provides no-fault medical coverage. In the event a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage. It does not, however, pay the medical bills for your family or your pet.