Protect your most valuable asset – your home

Your home is likely the most valuable asset that you own, and protecting that investment makes very good sense. Your mortgagee (lender) may require that you hold homeowner’s insurance on your home, as they have an insurable interest in it as well. However, the choice of insurance companies is yours. Let us compare coverage from several different insurers for you to get the best coverage at the most affordable cost.

Homeowners insurance comes as a package policy – this consists of different types of coverage for the house, contents, additional living expenses, personal liability claims against the insured and members of their household, and also medical payments to others. This bundled coverage is combined into a single premium amount.

What does homeowner’s insurance cover?

Typically, homeowners insurance covers your dwelling, other structures and contents and may cover losses due to the following perils:

• Fire
• Lightning
• Windstorm or Hail
• Explosion
• Riot or Civil Commotion
• Aircraft
• Vehicles
• Theft
• Glass Breakage
• Smoke

The typical homeowners policy has two main sections:

• Section I covers the property of the insured, including building, structures and personal property
• Section II provides personal liability coverage for the insured. If someone slips on your icy walkway, or a limb from one of the trees on your property falls on your neighbor’s roof, this type of insurance covers the loss. It can protect you and your family from costly damage awards due to litigation.

You may elect to buy broader homeowners coverage, which can provide additional protection for your dwelling and contents, or special homeowners endorsements such as building code upgrade coverage.

Your policy also covers the loss of use, including increases in living expenses due to a fire, or other insured loss on your property. Liability coverage protects you for injuries or damages to others caused by you, a member of your family, or pet. Medical payments insurance covers medical expenses to non-family members injured at your home. There are exclusions which are important to note: your agent should go over these with you.
What are some ways to lower the cost of homeowners insurance?

1. Your independent insurance agent can review your needs and shop different carriers to find the most complete coverage while keeping in mind that you also have a budget. Quotes from different carriers can vary greatly for the same coverage.
2. Discounts may be available by installing a security system in your home, installing deadbolt exterior locks, fire extinguishers and smoke detectors. Ask you agent how you can take advantage of these.
3. Purchasing homeowner and automobile insurance from the same carrier can also provide a discount, and check to see if other policies you may need can help as well. There are often lower premiums for multi-policy holders.
4. Although your home and its contents are at risk from fire, theft, windstorms and other perils, the land your house sits on is not. Don’t include the value of the land in deciding how much homeowners insurance you need to buy.
5. Raising the deductible on your policy will instantly save you premium dollars. The amount saved will vary depending on the insurance carrier and your location.

Is my personal property covered when I am away from home?

Yes, personal property (except that which is specifically excluded) is covered wherever you are in the world. If you suffer a loss while traveling which is due to a covered peril, you can make a claim for reimbursement to your insurance company.

What is the difference between “replacement cost” and “actual cash value”?

Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis.

• When “actual cash value” is used, the property loss is based on the value less depreciation.  This type of coverage is less expensive.
• Replacement cost” coverage reimburses the policy holder in an amount necessary to replace the article with one of similar type and quality at current prices. To get the full value of this coverage, and avoid any out-of-pocket expense, the homeowner should maintain a policy limit of no less than 80% of the replacement cost of the home.

Call us today at 410-871-0577 for more information and to get a quote, or email us at cedlund@mdinsurancepro.com