Homeowners / Renters Insurance

What is homeowner's insurance and why do I need it?

The primary reason for homeowner's insurance is to protect your investment in your home, condo, or apartment. For most people, a home/condo is their largest asset and they want to protect it against fire, hail, or other perils. Additionally, they have a substantial investment in personal belongings inside their home that can be destroyed and/or stolen. They also need liability coverage if a guest would trip and fall, or should they cause injury to someone (i.e. hit another golfer with a bad golf shot, etc.) A homeowner's policy is a bundle of coverages that protects your home, condo or apartment and you.

Home much coverage do I need for my home?

You need enough to rebuild the home & replace the personal belongings should a full loss occur. The policy provides replacement cost coverage so you want to have enough insurance coverage to rebuild the home & replace the personal belongings after a loss.

Your first step in determining the right homeowners coverage is estimating the replacement cost of your home. The second step is selecting the coverage amount that best fits your needs. We recommend that you purchase an amount of coverage equal to the estimated replacement cost. Since it is impossible to predict today what the exact cost will be to replace your home in the future, it's important to have enough coverage to account for unforeseen circumstances.

There is a difference between market value and replacement cost: "Replacement cost" is the amount needed to repair the damage or to rebuild the home to its pre-loss condition. For insurance purposes, the replacement cost of a home is NOT the market value of the home, its purchase price or the outstanding amount of any mortgage loan. It does not include the value of the land, but is the cost of rebuilding your home.

Some important things to consider when determining your coverage amount:

• Your home's estimated replacement cost is different than its market value (real estate cost).
• Each time you remodel or improve your home, you should adjust your coverage amount accordingly.
• If your home is made of unique building materials, make sure they are reflected in your replacement cost estimate.
• Stay abreast of the fluctuating building costs in your area and update your coverage amount accordingly. Make sure that you maintain coverage at 100% of your home's estimated replacement cost at all times.
• It is important to review your coverage annually and inform your agent of any changes you'd like to make.

And remember...

A homeowners policy is designed for the "average homeowner". If you have special items like jewelry or furs valued over $1000, special collections, golf cart or R/V, sump pump you may need a special "rider" on your policy to provide "above average" coverage on your home or personal possessions. Spending a few minutes with your agent can be time well spent should a loss occur and you then find you didn't have the right coverage.