Homeowners Insurance

Homeowners Insurance

Not all homeowners policies are created equal and it’s impossible to compare homeowners insurance by just looking at the limits on your policy. For a fair comparison, you really have to dive into the policy and take a longer look at what each company covers the specific risks associated with your specific home. Many companies have recently created homeowners insurance that are similar to a cafeteria type of policy where the agent can select from the cafeteria the coverage they feel their client needs and if the rate is too high, they can simply leave some coverage off. Here are some coverage’s to consider when shopping for homeowners insurance, please make sure to refer to your policy and declarations page to know what coverage your individual policy has.

Dwelling Replacement Cost Coverage:

Almost every homeowners policy these days has some type of replacement cost coverage for the dwelling. Most companies include a 25% replacement guarantee meaning they will cover up to 25% higher than the dwelling limit on your declarations page in the event of a total loss. So if your dwelling is covered for $200,000, they will pay up to $250,000 in the event of a fire or total loss. We represent companies that offer a 50% guarantee and companies that simply guarantee replacement of your home. Refer to your declarations page and policy for details on your individual coverage or give us a call.

Replacement Cost Contents Coverage:

Most policies include this coverage as well so that your contents or personal property is not depreciated in the event of a loss. If you have any extra valuable items that need special coverage, please let us know.

Earthquake Insurance:

Earthquake coverage is a coverage we get a lot of questions about. The most common question is the cost? Just shooting from the hip, if you add earthquake coverage to your current homeowners policy, the rate will normally double. There are however other things to be taken into consideration before adding earthquake coverage, here are a few of those. The major thing to be taken into consideration when adding earthquake is if your home is in a high damage zone area. On our website, you will find several links to web sites that you can use to determine whether or not your home is in a high earthquake damage zone area. You will want to make your own determination and decision whether or not your home is in a high or low damage zone area and while we cannot make this determination for you, call our office for help with understanding information on the links. Another item to consider is the earthquake deductible. The average deductible for earthquake coverage on a homeowners policy is 10% of the dwelling coverage so if your home has coverage for $300,000, the earthquake deductible would be an average of $30,000, sometimes higher and seldom lower. Solid brick homes are also very expensive to cover for earthquake damage and almost cost prohibitive. We do have some options for older brick homes for coverage that can replace solid brick homes as frame homes, call us for details. At Anderson Insurance Group, we do represent companies with the best earthquake options for Utah, call us for details on earthquake insurance coverage for your home.

Coverage For Extra Valuable Items:

Homeowners policies will cover the standard items that a homeowner owns and every policy will include limits or limitations for extra valuable items. Please refer to your individual policy and declarations page for limits. The most commonly endorsed extra valuable items endorsed onto a policy include jewelry and tools used in a business but the list can be extensive. Please contact us if you have jewelry that you would like to endorse or any other extra valuable item you are concerned has the right coverage.

HO-5 Contents Coverage

HO-5 Contents coverage is a newer generation of contents coverage that will do two things for you. First, it will give you higher limits for your personal property including higher limits for the two most commonly items endorsed onto a policy, jewelry and tools or items used in a business. HO-5 contents coverage will also give you broader coverage for your personal property items. Second, HO-5 coverage will give you coverage for more than just the standard 17 perils by removing the limitation for damage from only those perils and expands coverage to open perils with a few exclusions for things like flood and breakage. Depending on the company, HO-5 coverage can even cover your contents for damage from earthquake. Most policies do not include HO-5 contents coverage and it can be an easy way to add higher limits for your personal property. Refer to your individual policy and declarations page to know if you have this coverage or much easier, call Anderson Insurance Group for more information.

Coverage From An Exterior Water Or Irrigation Pipe:

This is a big deal in Utah where almost every home has a basement that can suffer extensive damage from a broken exterior water or irrigation pipe. This is a coverage that is not included on most policies but in our agency, almost every company that we represent covers this type of loss. Each loss that involves damage from an exterior water or irrigation pipe has to be investigated separately and are subject to the language and limitations of the policy which can include exclusions for “surface water” so while we cannot guarantee that every type of loss of this nature is covered, most are and it is a super important coverage to have to protect your home. This is not a coverage that will be indicated on your declarations page, the language is included in the body of the policy so if you have a question regarding this coverage, please don’t hesitate to contact our office for more information. We will be more than happy to provide you with the language within your policy that indicates that this is covered or from a competitors policy indicating it is not covered.

Coverage For Resulting Damage From A Water Or Sewer Backup:

This is a super important coverage and without it, things can get really messy. Almost every policy we sell includes coverage for damage from a water or sewer drain backup but not every policy does. This coverage will normally have a limit of $5000.00 or $10,000.00, you will want to refer to your declarations page and policy for information specific to your coverage and make sure that your home and property is covered for this type of loss.

Coverage For Ordinance And Law:

Ordinance and Law coverage will pay to rebuild your home to code in the event of a loss. Most policies include a limit equal to 10% of the dwelling coverage and sometimes that limit can be increased. This coverage will pay to reconstruct your home to current building codes required by your city after you have had a loss. An example can be after you have suffered a loss, say a fire, the restoration company or contractor will contact the city for a building permit to rebuild your home and the city planning and permits office may require that in order to rebuild the damaged part of your home, the undamaged part will have to be rebuilt to code. The city may require you to re-wire a part of the home they feel is a hazard, they may require you to replace a part of your roof that is undamaged and bring it up to code and the entire roof is replaced, these are just a few examples. Building codes change and evolve over the years so a home built even just 20 years ago can be required to be rebuilt to new codes, a home that is more than 25 years old should always have this coverage. Not every policy includes this coverage but most policies that we sell do, so you will want to check and make sure you have this type of coverage.

Water Seepage And Leakage:

A page discussing homeowners insurance would not be complete without discussing water seepage and leakage. We all have water in our homes, it is essential to life but unfortunately water is also the thing that causes the most damage to homes. One thing that no homeowners insurance policy covers is water seepage and leakage or damage from water that occurs over an extended period of time. The policy language from every company will be just a little different but the peril that is not covered by any company is water that leaks over an extended period of time. You will just want to be aware of the areas of your home that have water pipes in the walls and if you get a musty or mildew smell in your home, look into it immediately because if you let it go thinking it will just go away and It continues to leak, this is the type of loss commonly denied by insurance companies.

Water that may leak or seep through an exterior wall or opening in the home like a window is also a type of water seepage or leakage that is not covered by any insurance policy. I remember the first home that we owned was built in 1950 and had a leaky foundation. A coat of sealant on the interior wall helped solve that leaking problem in that home and more extensive damage. In my previous office we had a foundation of cinderblock on top of cement, not a preferred building method and it had leaks from exterior water and snow melt. We had to have a company come and put a rubber membrane on the exterior of that wall to stop the seeping and leaking, something the insurance company did not cover but something that was necessary to prevent further loss from water, mold and mildew.

ACV Roof Coverage:

ACV or an Actual Cash Value endorsement for your roof coverage is added when roofs are older or in a deteriorated condition or perhaps at the end of their life span. The settlement varies by company but is based on a depreciation schedule determined by the company. The ACV roof endorsement allows a company to provide coverage for the rest of the home and accommodate a roof that may not pass inspection for replacement cost coverage otherwise.

ACV coverage for roofs is becoming more and more common as companies try to eliminate the gray areas between replacing a roof because it is old and replacing a roof that has wind or hail damage. ACV roof replacement puts the responsibility of roof replacement for roofs that are old and at the end of their lifecycle back on the homeowner as a maintenance item.