Six Primary Coverages That Are Included in Your Home Policy
Have you been searching for ”Chesterfield MO Home Insurance,“ and you’re not quite sure what home insurance coverages are necessary to protect you, and one of your most valuable assets? Many of us have been in a situation where we need insurance and depend on our mortgage company or shop online, to find the least expensive home insurance coverage. Have you considered if something happens to your home whether your insurance policy will actually cover the damage? Will it pay for ALL of it? As a homeowner, there are many risks our agents can help you avoid.
For most people, insurance is confusing. Homeowners may not understand the liabilities that come with being a homeowner and the protection of having the right coverages in the insurance policy. Homeowners in Chesterfield Missouri should be aware that the majority of mortgage lenders require homeowners insurance. This article, Chesterfield MO Home Insurance, will explain the primary insurance coverages that are included in your homeowners policy what they mean, what is not covered and additional coverages available to you.
CHESTERFIELD MO HOME INSURANCE: DEFINITION OF DWELLING
The word Dwelling in your home policy actually refers to your home itself. It includes attached structures, such as an attached garage. The Amount of Insurance (Dwelling Limit) listing on your Declarations page indicates the maximum amount your insurance company will pay to replace your home if it’s destroyed by a covered claim. But,is it enough?
Don’t make the mistake of thinking your homeowners insurance covers everything just because you have an insurance policy! Among other issues, you must make sure your Dwelling Limit is enough to rebuild your home.
Contact Alternatives Insurance® of Chesterfield and one of our experienced agents can run a cost analysis that calculates the cost to rebuild your home. Be sure to adjust the amount of insurance for your dwelling appropriately. If you don’t you may not have enough insurance to replace your home if disaster strikes.
Some policies include built-in protection above the stated Dwelling Limit – usually a percentage of the Dwelling – just in case the estimate is too low. We will make sure to discuss this with you as an additional protection feature. It’s probably worth having.
CHESTERFIELD MO HOME INSURANCE: OTHER STRUCTURES
The most common Other Structures are sheds, stand-alone garages (known as “detached” garages in insurance terms), barns, pool houses, etc. These structures are not directly attached to your home, that are referred to as the “dwelling”. Other Structures have their own protection limit – the most your company will pay to rebuild them will be stated on your Declarations page. This limit will be significantly less than the dwelling limit … typically 10% – 20% of the dwelling amount. For most people that’s plenty of insurance for other structures. But not for everyone. You need to know what it would cost to rebuild or replace those structures if they’re destroyed. Discuss it with the licensed professionals in our office. You can buy more protection for your other structures if you need it.
CHESTERFIELD MO HOME INSURANCE: PERSONAL PROPERTY
Your personal property includes all your personal items, such as furniture, clothing, electronics, appliances, etc. Similar to other structures, personal property has its own protection limit stated on your Declarations page. And, again, this amount is the most the insurance company will pay to replace your personal property. You can also add a Ryder to your insurance policy that will cover jewelry; so long as you have the proper documentation like an appraisal from a qualified jeweler. Your personal property limit is usually 70% – 75% of your dwelling limit. However, you can adjust this upward if you need more protection, Discuss your options with us. We’re here to help!
Regardless of the protection limit for your personal property, there’s a very important question you must get answered. How is your property protected? It is determined by the “actual cash value” or “replacement cost”? The difference is huge! In very basic terms, if your property is protected on a replacement cost basis the insurance company will replace your old stuff with new stuff. For example, if your 5-year old TV is destroyed in a covered claim, the company will pay for a brand new TV. That’s a good deal for you.
But if your property is protected on actual cash value basis, an “allowance for depreciation” is applied to the cost of a new TV based on the age of your destroyed TV. The result is you get a settlement amount less than the cost of a new TV. To buy a new TV you’ll have to come up with the difference out of pocket. Not as good of a deal for you.
Clearly, insuring your personal property on a replacement cost basis is a better advantage than actual cash value. Sometimes it costs a bit more, but not always. We can help you understand how how your policy works and can check the price both ways, to help you make the right decision.
CHESTERFIELD MO HOME INSURANCE: LIABILITY
Your liability coverage pays if someone sues you for their injuries due to a covered claim. When we think of such accidents we most commonly think of injuries that occur on your property – someone slips and falls, a dog bite, etc. However, the liability protection under your home policy extends beyond your property to your everyday life. Liability Insurance helps protect you against the financial burden arising from injury (or property damage) that you or your family may cause to other people. It typically even covers injuries whether they happen on or away from your property.
Liability insurance is all about protecting your assets from someone who sues you. So, you should have at least as much liability insurance as your financial worth. However, more than that may be prudent, and you should discuss your needs and risks thoroughly with a licensed agent at Alternatives Insurance® of Chesterfield. Your current liability limit will be stated on your Declarations page.
CHESTERFIELD MO HOME INSURANCE: MEDICAL PAYMENTS TO OTHERS
This coverage pays medical bills for a guest who is injured on your property or in another covered claim. The idea is to do the right thing for someone – pay their medical bills – and then hope they don’t sue you. This protection is inexpensive, but could save you major hassles by preventing a lawsuit.
CHESTERFIELD MO HOME INSURANCE: LOSS OF USE
Loss of use coverage provides monies for alternative living if your home is badly damaged and are you not able to live in it while it’s being fixed or replaced. That means you may have to pay rent somewhere or staying in a hotel while you’re also paying your mortgage. The Loss of Use coverage on your home policy pays those additional expenses for you.
Your Declarations page may state a dollar limit for this coverage, or it may state a time limit. If there is a dollar limit, this is the most the insurance company will pay for these expenses. If there’s a time limit, your insurance will pay all covered expenses regardless of the amount but only for the specified period.
Imagine your home is damaged by a tree crashing through your roof. You call your insurance agent to report the claim, and then you hear the worst news possible, “I’m sorry that’s not covered by your policy.” Now, you have a real problem.
The unfortunate truth is no insurance policy covers you for everything that could possibly happen to you or your property. However, with a little bit of understanding, you can make sure you have the protection you need, and you can rest easy knowing your claims get paid by the insurance company.
Just because you have an insurance policy, it does not mean everything and everyone in your home is covered. Your home insurance policy does not cover you against every “cause of loss”. Examples of “cause of loss” include fire, high wind, and other “perils”.
A standard home policy excludes many causes of loss. That is, it does NOT protect you from certain perils – like earthquake, flood, termite damage and many more. That means if your home is damaged by one of these excluded perils your policy will not pay and you have no insurance against them.
You can purchase additional coverage to protect you from perils like earthquakes and floods. However, some excluded perils are not insurable, such as insect damage. Be sure to discuss your policy exclusions with an agent in our office and we’ll help you determine the best protection you need. Don’t be caught by surprise after the damage is done.
CHESTERFIELD MO HOME INSURANCE: SPECIAL LIMITS ON PERSONAL PROPERTY
As if your home policy wasn’t complicated enough already! There are also “special limits” of protection for some of your personal property. A “special limit” reduces the protection specifically available for certain types of property. Property subject to a special limit typically includes property used for business, cash & coin collections, jewelry & furs, guns, silverware, valuable art and more.
Additionally, some of these special limits apply only if the property is lost or stolen – making things just a little more confusing. For example, the standard home policy typically includes $1,000 of protection for stolen jewelry. If your $2,500 diamond engagement ring is stolen, you will receive $1,000 from the insurance company. Ouch! And, if the stone falls out of the ring and is lost, there may be NO coverage at all!
It is very important you fully discuss these conditions and special limits with our agents and buy the protection you need. Otherwise, you could find yourself with a very nasty surprise … an unpaid claim!
CHESTERFIELD MO HOME INSURANCE: OTHER EXCLUSIONS AND OPTIONS
The standard home policy have exclusions for many reasons. But then the insurance company gives you an opportunity to buy some of them back. So, you have the option of increasing protection where you personally need it.
There are literally dozens of optional coverages available in your home policy. Here are some of the more common options available to you:
- Identity Theft – many home insurers now offer protection for Identity Theft in their home policies. This will help pay the expenses you incur to restore your identity if it’s stolen.
- Water & Sewage Backup – the standard home policy excludes damage caused by a water or sewage system backup. You can buy this protection if you want it.
- Ordinance & Law – pays the increased costs of repairing or rebuilding your home that are required to be build in accordance to current building codes.
- Packaged Endorsements – often times an insurance company will package the optional coverages people most commonly buy into a single endorsement for a lower price.
There are many more optional coverage and exclusion buy-backs our agents can explain to you. Its worth the time to spend with your Alternatives Insurance® of Chesterfield agent to understand the coverages available and make good decisions about your protection.
Alternatives Insurance® of Chesterfield has access to many insurance carriers and thousands of different products to choose from. These insurance carriers allow us to tailor an insurance policy specifically to your needs and help cover your risks.
The Missouri Home Insurance Guide is a great resource to help you understand Chesterfield MO Home Insurance requirements. Read through this guide and contact an agent with Alternatives Insurance® of Chesterfield to schedule a free consultation. (636) 449-1213