The location and condition of your home, its age and replacement cost, your credit history and other factors influence the price of homeowners insurance. The deductible and coverage limits you choose also affect your premium.
Dwelling coverage should be high enough to cover the cost to rebuild your home at current labor and material costs. Other Structures coverage covers structures like fences and sheds; it’s usually 10% of your dwelling coverage. Find out more at Leading Insurance Outsourcing Company.
Homeowners Insurance
Homeowners insurance offers financial protection against damage to your home and personal belongings as well as liability coverage for injuries on your property. It’s typically required by mortgage lenders.
Most standard policies offer coverage for your house and its contents as well as structures like sheds and freestanding garages. These are usually covered up to a percentage of the dwelling coverage limit. A common limit is 10%.
Your insurance company can’t discriminate on the basis of race, religion, national origin, sex, age, marital status, homeownership, or possession of firearms, or use of public assistance in providing, renewing, or cancelling homeowners insurance. Other factors, however, may be taken into account when determining the premium rate, including your credit score, neighborhood, building material availability, and your past home claims history.
You can choose between a cash value policy and one that covers the replacement cost of your home and its contents. The latter option typically costs more, but it pays out the current replacement cost rather than its depreciated cash value. Some insurers also offer an Inflation Guard endorsement that increases your coverage by a set amount at each policy anniversary.
Renters Insurance
Designed for people who rent a home, townhome, condo or apartment, this type of property insurance covers personal belongings and offers liability protection. Lemonade’s tenants policy is written on a broad form (HO-4) that protects renters from the same perils as homeowners with the addition of additional living expense coverage and personal liability protection.
A key feature of a renters policy is the personal property coverage that reimburses for stolen or damaged possessions, up to a certain dollar amount. It’s a good idea to complete a home inventory app so you can document your belongings and estimate their value to determine how much personal property coverage you need.
Additional living expense coverage pays for hotel bills, restaurant fees and pet boarding if your home is rendered uninhabitable by a covered event like a fire or flood. Many renters policies also include personal liability protection, meaning your insurer will cover your legal expenses if you are sued for something that happened at your rental home.
Condo Insurance
A condo insurance policy (HO-6), also known as walls-in coverage, pays to repair or replace everything in your condominium from the drywall in if damaged by a covered peril. It typically includes personal property coverage and liability protection. The condo insurance policy usually doesn’t cover damage to areas that are shared by other condo owners, such as the building stairwell or a party center; those issues are often covered by your condominium association’s master policy.
Homeowners can also add on coverage for items that are expensive or irreplaceable. These are called scheduled items and are usually listed on the policy and have what are called special limits or sub-limits for things like jewelry. Like other types of home insurance, it’s important to compare the coverage and price options of different policies. It’s also smart to research home insurers using ratings from organizations like AM Best, J.D. Power and Weiss Ratings, which look at things like customer satisfaction and financial stability.
Commercial Insurance
Homeowners insurance policies do not cover damage to business property. They also exclude damage caused by termites, rodents and other pests. In some cases, sinkhole damage may be excluded as well. Flood damage is generally covered by separate insurance policies, as are damages resulting from poor home maintenance or earthquakes.
Home insurers usually offer a wide variety of homeowners policies. Some are broad forms (HO-2), others include named perils coverage (HO-8). The HO-2 policy typically covers your dwelling and personal property against the same listed perils, but without replacement cost coverage. The HO-8 offers replacement cost coverage, but it is normally limited to 10% of your dwelling coverage limit.
Many homeowners find that the amount of their policy’s dwelling coverage limit is not adequate in the event of a total loss. Your producer can help you determine if you need to increase your coverage limits. He or she can also assist you in obtaining an Inflation Guard Endorsement that allows your policy to automatically increase its coverage limits by a percentage each year to keep up with inflation.