Thank you for inquiring. Scroll below to see your Homeowner Checklist!
Homeowner Checklist
60% of homes are underinsured. This couldn’t have been more prevalent than when lumber went up 364% during the pandemic.
You need to understand the difference between market value, loan value and replacement cost.
The Replacement Difference
Market Value
What the home will sell for…..The only thing your real estate agent cares about.
Loan Value
What you borrow on the home …..The only the your mortgage company cares about.
Replacement Cost
The amount it costs to rebuild your home from scratch, including the price of labor and materials, in the event of a covered loss. What you should care about.
The Difference Between
Open/All Peril vs Named Peril
Named Peril
Term for a specific type of damage or cause of loss, called a peril, that is listed by name on an insurance policy
Open/All Peril
Means that damage or loss from all potential perils may be covered unless specifically excluded in the insurance policy.
All Peril covers everything unless specifically excluded. Named Peril coverage only covers it if it’s named specifically. Named Perils: wind, hail, fire, tornado, etc.
What’s the difference? If you had a dinner party at your house and someone spilled red wine on the carpet, with an All Peril policy, you would pay your deductible they would replace the carpet. With named peril. It would have to be wind blowing a tree into the roof, causing the wine to spill….. drastically different coverage.
Most of your advertising carriers do not offer all peril policies by definition they’re twice as comprehensive, and the premiums are similar.
Having backup of sewer and drain as well as service line coverage on a finished and non-finished basement is imperative.
The basement as well as the furnace and in some cases the washer and dryer are down there as well. Also, the cost to clean up in the event it happens. Even if there’s a sump pump, damages have already occurred. More than 500,000 sewer backups occur each year.
You should also take a step further by adding service line coverage for later lines etc. The average cost for repair is around $10,000.
If you have a finished basement the only coverage you truly have is backup of sewer and drain coverage. That said even if your basement is not finished you should still add backup of sewer and drain coverage because in most cases you store things in the basement.
Replacement Cost On All Personal Property/Contents
It protects possessions like televisions, furniture, and more. It covers the cost to fully replace your personal property if it is damaged or destroyed by a covered loss.
Without this endorsement, it gets paid on an ACV basis. ACV actual cash value is the replacement cost value minus depreciation. Meaning the year, you purchased the item minus depreciation for every year you owned it…. You get what’s left over.
For example, say you bought a couch for $3,000 five years ago, and now it’s worth $1,500. If it’s damaged in a claim, here’s what you’ll get: Actual cash value: You’ll get $1,500 because that is your couch’s actual value after five years of depreciation.
Personal Articles Policy
Personal articles insurance policy is for things that don’t fall under personal lines.
What’s covered: Jewelry, gun collections, artwork, heirlooms
Most people believe once they bring it inside the house it’s personal property but nothing could be further from the truth.
Personal property on homeowners was created for furniture, dishes TVs, clothing, etc.
This does NOT include jewelry, furs, cameras, musical instruments, silverware, personal computers, china and crystal, artwork, wedding rings, gun collections, etc.
Know the difference or be disappointed in the claims process.
Other Structures
Homeowners insurance only gives you 10% of other structures coverage automatically.
This protects structures on your property not physically connected to your home, such as a detached garage, storage shed, or gazebo 10% for patio, pools, etc.
So, if your home is insured for 250k you would have 25k of coverage.
In most cases this needs to be raised.
Roof Coverage Explained
If your roof is older than 15 years, it would be paid out on actual cash value not replacement cost.
Actual Cash Value (ACV)
Actual cash value (ACV) roof coverage means that your insurance company agrees to pay you for the value of your roof in its current state. Essentially, depreciation is factored into your claim settlement. Depreciation is calculated by a claims adjuster, who will inspect the roof to determine its replacement cost, review its current condition and estimate its remaining lifespan.
Replacement Cost
Replacement cost is full coverage without depreciation.
For example, a comparable brand-new roof might cost $20,000 and have a lifespan of 20 years. This would mean that it loses 5 percent of its value each year. If your roof is 10 years old, it has lost 50 percent of its value, meaning the actual cash value of your roof is now $10,000. Additional depreciation may be taken out based on the condition of your roof. Some 10-year-old roofs may still be in great condition, while others could be impacted by unrepaired wind or hail damage.
Earthquake and Flood Explained
9 out of 10 times earthquake and flood are standalone policies. Meaning not automatically included in traditional homeowners’ insurance.
Earthquake Insurance
Earthquake insurance can sometimes be added to homeowners, but also can be purchased as a standalone policy, but what most people don’t recognize is, if you don’t have earthquake insurance, you have no coverage in the event of an earthquake. The other misleading part of earthquake insurance is the standard earthquake deductible is 20%. That means 20% of the coverage of your home.
If your home is insured for 350k with a 20% earthquake deductible you would pay 70k in
order for the coverage to be used. With a standalone earthquake policy sometimes you can go as low as
10%, 5% and even 2% deductible, which makes earthquake insurance usable and more affordable in the
event of an earthquake.
Flood Insurance
Flood insurance is typically only used when the home is in a flood zone. However, it can be purchased in areas that are not designated as a flood zone, but has a high potential for water. People usually mistake flood insurance for having a pipe break or backup of sewer coverage.
Flood is any water that is coming from the outside to the inside.
Flood insurance is not inexpensive but the only option if you are concerned water has a likelihood of coming in.
WATER CLAIMS THAT HAPPEN INSIDE ARE COVERED BY HOMEOWNERS INSURANCE
Now that you have the tools for success, what will you do?
Get a Complimentary Home Replacement Cost Estimate On Us
Find Out If Your Home Is Underinsured Today!
RECEIVE YOUR
REPLACEMENT COST ESTIMATE
We’ll be in touch with you shortly.