Home Insurance Coverage
Why do I need homeowners insurance?
For most of us, our home is the single biggest asset we will invest in. Homeowners insurance provides coverage for your personal belongings, coverage for damages to the structure of your property, and liability coverage which pays for bodily injuries and property damage to other people if you are liable.
Whether you own a house or condo, or you rent, your Farmers agent has an insurance program to protect you, your home, and your belongings. What kind of insurance policy do I need to protect my home? That depends on whether you are renting, or buying a house, condo, or townhouse?
How can I make my home safer and possibly save money?
Homeowners who guard against theft, accidents and other losses can often get lower insurance rates. Here are some things you can do to help qualify for lower premiums:
- Secure your home with dead bolts and window locks.
- Install a security system with outside signal and connection to local police.
- Install and maintain smoke detectors.
- Install a sprinkler system for fire.
- Install a fire alarm that automatically alerts the local fire department.
- Stop smoking.
- Keep walks and entrance ways clear of snow and ice.
Every year, take the time to check the value of your insurance policy against rising local building costs. Your Farmers agent is available to review your coverage and ensure adequate protection is in place.
Check the latest building codes in your community. If your home is severely damaged, you might have to rebuild it to comply with the new standards requiring a change in design or building materials.
Do not insure your home for the market value. The cost of rebuilding your house may be higher (or lower) than the price you paid for it or the price you could sell it for today.
Some banks require you to buy homeowners insurance to cover the amount of your mortgage. Make sure it's also enough to cover the cost of rebuilding.
Increase the limit of your policy if you make improvements or additions to your house. You may upgrade features in your home to fit your tastes and lifestyle. These enhancements can significantly increase the replacement cost of your home. Your Farmers agent will be available to help in determining if additional coverage is needed.
There are two distinct ways to insure your personal possessions
1) Replacement cost coverage This coverage pays you the dollar amount needed to replace personal property without any deduction for depreciation, but is limited to a maximum dollar amount.
2) Actual cash value This coverage pays you an amount equal to the replacement value of damaged property minus depreciation. Unless a Homeowners policy specifies that property is covered for its replacement value, the coverage is for actual cash value.
Many people make the mistake of underestimating the value of their home contents. This mistake is easily made when you consider the amount of new items we purchase each year. Under-insurance can lead to heartache and inconvenience should the unexpected happen.
What kind of protection do I need against liability claims?
This coverage is part of your Homeowners Insurance policy. It protects you and your family against property damage or bodily injury claims for which you are legally responsible. Liability insurance covers you, for example, if someone slips and falls on your property or if your dog bites someone.
Today, when multimillion-dollar lawsuits are common, your homeowners policy may provide substantial liability limits, but it may not be enough.
Will my guest's medical expenses be covered if they're accidentally injured on my property?
A neighbor slips on my sidewalk and threatens to take me to court for damages. Does my homeowners policy protect me? Yes. Homeowners insurance will pay for damages, if the accident is the result of your negligence. It will also pay for the legal costs of defending you against a claim. Also, the medical payments part of your homeowners policy will cover medical expenses arising from an injury to a neighbor or guest. Your local Farmers agent can periodically review your policy limits to help ensure you have adequate coverage.
Contact us if you have a specific question about types of home coverage.