Tis the season to give thanks – so let’s discuss insurance coverage every homeowner should be thankful for. The following coverage can be purchased as endorsements - though some carriers include them in your package free of charge!
Here are 5 Homeowner’s Coverages to be thankful for:
#1. REPLACEMENT COST
Chances are you worked hard to purchase your home. In the event that a total loss occurs, you want to make sure that your insurance settlement is adequate to cover the costs to rebuild your home. Beware – some homeowner’s insurance forms offer ACV (Actual Cash Value). ACV is the cost to rebuild minus depreciation. Replacement cost guarantees that you will be paid (up to your policy limit) what it costs to rebuild your home in today’s market. Most companies offer specified additional replacement cost, or guaranteed replacement cost, which provides you with more coverage in the event that you suffer a total loss.
#2. WATER BACKUP, DISCHARGE, OR OVERFLOW
As winter approaches, properties become vulnerable to heavy rains and melting snow, as well as pipe breaks which could cause water or sewage to back up into your home. Fret not! For an inexpensive cost, you can be covered for this type of loss. Water back-up coverage offers limits to pay for water damage to your home as a result of this type back up, discharge, or overflow. A Chubb study found that 57% of homeowners who have experienced a water leak claim in the past two years spent more than $5,000 on clean-up costs, and 15% spent $20,000 or more. If you don’t carry this coverage, ask your agent for more information!
#3. OFF PREMISES THEFT
Let’s say your car is broken into, your briefcase and laptop are stolen, or perhaps those holiday gifts that were sitting in the back seat. Can you put in a claim with your auto insurance carrier? The answer is no. However, most carriers offer off premises theft coverage that will cover you for theft of your personal items that are temporarily away from your home. Typically, the limit is 10% of your property limit shown on the policy and the loss is subject to a deductible. This coverage is commonly available for an additional cost, and it’s certainly worth it!
#4. REPLACEMENT COST ON CONTENTS
Replacement cost on your contents is crucial! It covers the cost to fully replace your possessions if they are damaged or destroyed by a covered loss. As mentioned before, some insurance carriers offer ACV (Actual Cash Value) which will reimburse you for your items at a depreciated price. Replacement cost guarantees that you will be compensated to replace your items with new ones of like kind and quality. To ensure that you can restore the comforts of your home in the event of a loss, make sure you have replacement cost on your policy.
#5. EQUIPMENT BREAKDOWN
Washers and dryers, computers, dishwashers, refrigerators, ovens, heat pumps, HVAC systems, electrical panels, sump pumps, and many more appliances in your home are susceptible to sudden and accidental damage. Some of this equipment is costly to replace – that’s why it’s important to have this coverage. Equipment breakdown, sometimes referred to as Mechanical Breakdown or Home Systems Protection, offers coverage to repair or replace your essential home systems and personal property in the event of unexpected mechanical or electrical breakdown. It’s a great coverage to have, just keep in mind the damage cannot be due to normal wear and tear or corrosion.
Feeling appreciative yet? If you don’t carry these coverages on your homeowner’s policies now, contact your agent or broker and inquire about adding them. Any questions? Let’s talk!
Opinions expressed in this article are solely the author’s opinion, not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.