Your Situation: Tips For Homeowners on Insurance Coverage’s That Impact Many People

Coverage for Your Home or Condo and Unique Situations
Protect Your Unique Property or Home Situation

Tips to Consider as You Protect Your Home or Condo:

When you receive a home quote or new homeowner’s policy, it is best to review the coverages. 

Dwelling Replacement Cost and Increased Limits Coverage:Most people have their physical structure insured on a replacement cost basis. Check with your agent because not all carriers have the same features.  If you have had your same home or condo policy for awhile it is time to review and it is especially important if your structure has been remodeled or you have built an addition. Some times referred to as “guaranteed replacement cost”, this feature protects the homeowner from being short financially in the event of a total loss (example, fire or tornado). Don’t think you need to check? Keep in mind that labor and material costs adjust yearly, and you don’t want to be caught short. Many carriers provide an increased limit of 125% of your dwelling coverage.  It is wise to review with your agent as higher percent increments are available.
Replacement Cost means your covered loss will be paid to replace the item with like kind or quality at today’s cost. If you don’t have replacement cost, your claim will be paid on an actual cash value basis or ACV. That means, the age and condition of the property or item will factor into value.

Example: 2 years ago, you bought your house at a market value of $100,000 and it was insured for $100,000. Replacement cost today is $115,000. Because you purchased a dwelling replacement cost coverage to 125%, you would have coverage to $125,000.


Personal Property Replacement Cost Coverage: This is an optional coverage that is inexpensive and can save you come claim time. This feature provides replacement cost or today’s cost for home or condo contents items destroyed or lost. Think about how material and labor increases costs of goods. By adding this coverage, the payment of your claim will be for a replacement and not on a depreciated value.

Example: You purchased a leather sofa in 2012 for $1,200. The sofa was destroyed by fire. To replace it today would be $2,000. With personal property replacement cost, the payment would be based on the replacement cost of $2,000 


Collections, guns, jewelry, securities and money:These items have sub limits (some depend on claim type, e.g., theft). If you own large collections or have high values of these items, it is best to schedule the item or purchase increase limits. You’ll protect yourself from unexpected gaps in coverage. In the case of scheduling, coverage is enhanced; in some cases, deductibles do not apply.
–Schedule means list with your insurance carrier for separate coverage and valuation;  for an additional premium.

Example: You have a $20,000 gun collection. Most policies will pay a limited amount as stated, like $2500. If you purchase increased limits, you can raise the sub-limited amount and ensure your collection has enough coverage.

Building Ordinance or Law: Is your home older? Ever wonder if prior owners might not have followed code during renovations or if code changes might be implemented in your community? Should you have a loss, during a rebuild process, required code changes can impact the cost to rebuild. This coverage protects the customer in a variety of ways. Impact can affect both damaged areas and undamaged areas of the home that may need retrofit. This coverage is important to consider avoiding costly gaps.
–More detail: Many communities have a building ordinance(s) that  require  a building that has been damaged to a specified degree (for example, a certain percent) must be torn down and rebuilt or upgraded to a certain standard.
Coverage can be added for loss caused by enforcement of ordinances or laws. Older structures that are damaged may need upgraded systems like electrical; plumbing or engineered foundations. Many policies have limited coverage or no coverage.  However, coverage for these loss exposures is widely available by endorsement.

Example: Fire damages your kitchen, living room, garage and porch. Your community has a law that requires electrical to be upgraded when more than 50% of the building is damaged. The building ordinance coverage will allow for payment to update the electrical in the undamaged areas of the home. 


Business Pursuits: With more home-based businesses and the trend toward creating income streams to supplement a job or retirement income, many folks overlook adding coverage like a business pursuits endorsement. Coverage provides extended liability and increased business property coverage. Consider this coverage and beware, as a recent survey showed that 39% of respondents thought other insurance for business pursuits was unnecessary since they had a homeowner’s policy.

Watercraft, trailers and golf carts: Be aware that these types of items have limited or restricted coverage. Depending on size/cost of the item it is wise to speak with your agent to be sure you have the proper coverage for these types of items.

Increased Mold Coverage: Yesterday’s and today’s methods of construction can impact the level of moisture in a home. Mold can form because of water intrusion or escape from plumbing or appliance systems. Water damage is costly to repair. There is nothing worse than having mold form inside hidden areas of your home following such an event.  Many carriers include pollution exclusions in their homeowner policies. An option exists to buy back or purchase increased limits for mold damage.

Loss Assessment, home and condo units: Have a homeowner’s association (HOA)? Did you know that HOA’s can levy an assessment against homeowners for losses or judgments? Many home, and condo policies provide loss assessment coverage; however, it is usually limited to $1,000. Your agent can assist you by adding additional coverage limits. Don’t overlook this issue as more than 20% of property owners have a HOA.
–More Detail: A HOA can assess membership for deductibles following a loss to common property or for other situations like unexpected/uncovered losses or a judgement against the association.

Questions: Call us 515-259-7782 or Easily Schedule a Meeting/Phone Call Convenient to Your Schedule: https://calendly.com/tim-258

Financial products and Insurance are provided through partner carriers. See disclosures and product materials for specific features and benefits.  An agency relationship is not created by viewing or reading this blog. Examples of protection are not all-inclusive and policyholders should refer to their policies for full coverage details.  ©Smith-Kenyon Insurance Resources, LLC 2018