Looking to change your Homeowner’s Insurance plan in the coming year? Wondering what to include, exclude, add-on? We’ve got you covered. Here is a handy homeowner’s insurance checklist to ensure you get the right coverage for your needs in 2021.
Key Coverages in a Standard Homeowner’s Policy
Many coverages come standard on any homeowner’s policy that you don’t need to worry about adding, but you should become well-versed in what those coverages actually mean for you. These 6 coverages are nearly guaranteed to be included in your basic homeowner’s insurance plan.
Structure or Dwelling Replacement
Dwelling coverage is the part of your insurance policy that would cover any damage done to the actual structure of your home, not the property or land. This can be for a single section of your home or any catastrophic damage that may occur.
To determine how much coverage you need, you and your insurance company will need to figure out the dwelling replacement cost. You’ll need a few things to figure this out. First, research the average cost per square foot in your area and multiply that by your home’s square footage. Then add that to the cost of all interior and exterior additions like cabinets, windows, doors, flooring, etc. This should give you a fairly close estimate of how much you would need to re-build structural damage.
Any other structures or shelters you have on your property can be covered by your homeowner’s policy as well. This includes but is not limited to sheds, fences, workshops, garages, gazebos, etc. Make sure to list every additional structure you have aside from your home when applying for coverage.
Personal Property Damage & Theft
Similar to tallying your home’s value, you can also add up the supposed value of all personal belongings of necessity such as clothes, furniture, and things deemed necessary for living. These will be added to determine the replacement cost on contents should a catastrophic event ever damage all of your belongings.
You will want to get additional overage for your personal valuables, sometimes not covered under the personal property standard coverage. Most people will get coverage for anything costing over $1000, like electronics and jewelry. You can purchase additional packages to cover things like china dishes, expensive stemware, antique furniture, furs, weapons, and other valuable assets.
Loss of Use
Loss of Use, also known as Additional Living Expense, is coverage that would provide assistance paying expenses should your home ever become unlivable, either from damage or receiving repairs. Expenses covered or reimbursed include storage of property and belongings, temporary housing, additional food, furniture rental for temp housing, relocation expenses, etc.
It’s important to note the ALE coverage is only for anything over your usual monthly allotted amount. So it does not pay the mortgage, utility bills, and other standard household things you would normally pay. It is for additional expenses caused by being displaced and having those added costs such as moving and storage expenses and even eating at a restaurant due to being displaced without a kitchen.
Personal Liability Insurance
Some of the biggest payouts in court occur when someone files a claim or lawsuit against an injury or incident that happened on someone’s property. If that property is yours, and you are found liable for and someone getting injured on your property, you will be the one paying for it. This coverage is critical to protecting yourself against large lawsuits, and legal fees should this occur. This coverage will apply to any family members living on the property and will not cover intentional damage done by anyone living on the property and covered under the policy.
Medical Payments for Incidence On Your Property
Medical payment is separate from liability insurance in that it would specifically cover any medical expenses for anyone injured on your property. Regardless of fault, this coverage is essential to have to protect yourself from extensive costs when accidents happen. The personal liability insurance is a bit different in that the coverage would pay for the claim filed plus any legal fees, not including any accrued medical expenses.
There are some coverages that may require being an additional add-on, or they just aren’t something considered to be standard on all policies. But they are definitely something to look into depending on your living situation.
Ordinance or Law Changes
Many policies will include a small coverage for any costs associated with changes to building codes. If you are considered about more, you can try and get additional coverage for these sorts of fees and costs associated with ordinance or law changes.
Running a Business From Home
If you use any part of your home for running a business, this won’t be covered by your standard homeowner’s insurance policy. In fact, depending on your state or insurance company, you may need to obtain commercial insurance. Otherwise, to cover any small business expenses, you can add on business coverage to many homeowner’s insurance policies.
Earthquake, Flood, and Hurricane
Lastly, typical home insurance will cover damage to your home caused by fire, wind, and hail. Fun fact, it is said the Great Fire of 1666 that destroyed over 13,000 London homes triggered the inception of home insurance coverage. Never again would homeowners have to worry about recovering damages after such a devastation.
Any weather aside from that, such as floods, hurricanes, tornados, or earthquakes, will not be automatically covered by your policy. Some places like North Dakota and other plains states are at risk of 100-year floods and are required to add flood insurance to their policies. Check with your local state regulations and talk to your insurance provider to add on any coverage of this sort if those types of severe weather are a concern.
Download our helpful Homeowner’s insurance checklist for your own use! If you ever have questions regarding what is or isn’t covered by your homeowner’s insurance, don’t hesitate to call us. We can work with you and your insurance to get you the proper coverage.