Homeowners Insurance
Homeowners Insurance may seem fairly straightforward, however Homeowners Insurance can be more than meets the eye. For example, did you know that if you have a camera stolen from you while on vacation in Europe your Homeowners Policy would provide protection, less your deductible of course. Below we'll cover the basics, but if you have more specific questions feel free to send a message or call.
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Dwelling Coverage ($350,000)
Dwelling Coverage is the amount of money the Insurance Company calculates using both readily available public information and pictures of the home to calculate replacement cost. Dwelling Coverage indicates the amount of money it will take to rebuild just the structure of your home in like or kind condition. Keep in mind this number will not represent land value or market value. Its only purpose is to identify the amount of money it will take to replace the structure of the home.
Personal Property Protection ($262,500)
This number is typically calculated as a percentage of your dwelling coverage. So for this example ($350k*75%)= $262.5k. This is the coverage that restores or replaces personal property due to a covered loss. It is important to keep in mind that most Insurance companies have restrictions on certain types of personal property like cash for example. If your home was burglarized, it would be hard to prove exactly how much cash you had before the incident. Other things like high value items or collections are probably best protected with their own special riders on the policy. This is typically referred to as "scheduling personal property".
Additional Living Expense ($87,500)
Typically figured as a percentage of your Dwelling Coverage amount ($350,000*25%)=$87,500. Additional Living Expense Coverage provides you with monies to comfortably be away from your home, as the result of a covered loss and it is deemed necessary to have the home vacant while the home is repaired or rebuilt.
Other Structures Coverage
Generally figured as a percentage of your Dwelling Coverage. Other Structures Coverage protects "Other Structures" on your property. Sheds, Utility Buildings, Barns etc.. However in the event you have additional "dwellings" on your property it might best to consider increasing this coverage or setting up two separate policies.
Building Codes Coverages
Figured as a percent of Dwelling, Building Codes Coverage covers you when you're involved in the remediation process of a covered loss and it's noticed that things need to be brought up to code in order to remain compliant with your local laws. This coverage is covering the necessary expenses in order to get up to code.
Extended Limits
Extended Limits coverage essentially gives you an extra %120 on top of the $325k for Dwelling Coverage. ($325,000*120%)=$390,000. So if need be, due to inflation, or shortages of materials etc... The Insurance policy can bump up the Dwelling coverage by an additional 120%.
Family Liability Protection
Family Liability Coverage protects you and your family against anything that you could be found liable for, on or off the premises. So for example, if you forget to shovel your walkway after a snow storm, and your HOA mandates that it be shoveled in a certain amount of time and you fail to do so. Then someone injures themselves due to your negligence, they can then come after you for damages. This would be your bucket of money to payout. If for some reason damages exceeded what Family Liability is scheduled to pay out then you would be out of pocket for the difference.
Guest Medical Protection
This coverage is what pays out if one of your guests are injured on your property. Whether it's your fault or not, these dollars are designed to help that guest receive medical attention and meet any necessary healthcare co-pays or deductibles.
Water Back-Up Coverage
This coverage applies to specific instances such as the sump pump fails and backs water up into the home. Also covered are things like sudden and accidental water back up into the residence. It's important to understand that other types of water damage generally are not covered unless specified within your policy.
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Frequently Asked Questions
How can I save money on my Homeowners Insurance?
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There are a couple things you can do to save money on your Homeowners Insurance. First, you can install a central Security, Fire & Smoke Alarm System. Secondly, you can change your deductibles. Finally, having a newer roof will dramatically lower your rates. Especially in a state like Colorado where wind and hail storms happen regularly, Insurance companies love to insure homes with newer roofs and even more so hail resistive roofs.
Why do my Homeowners rates always seem to change?
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Homeowners rates can be fickle. The main reason why is because the cost to repair or replace a home is always changing. Inflation can change the cost to replace a home by as much as 3% or $18,000 + in one year. On top of that certain parts of town may be more expensive than others. The reason being is that insurance companies rate on a zip code basis. If certain zip codes experiences more claims than ones across town they will inevitably cost more for insurance and have fluctuating rates.