It’s a given that homeowner’s insurance is vital if you want to have protection and coverage for when things happen to, in, or around your home. However, the average homeowner will have trouble understanding their policy and knowing what coverage is actually needed.
Most companies share the bare minimum information when it comes to signing up for a homeowners insurance policy and it can be so complicated that homeowners completely miss additional coverage they may need. Today we’re going to clear things up.
This guide will cover the basics and what a standard policy will or will not cover. But we’ll also help with some additional information that could help you choose the best possible coverage that won’t leave you out to dry after a bad storm. Read on to ensure adequate coverage for your home.
What Does Homeowners Insurance Cover?
The average homeowner’s insurance policy will cover the dwelling, other structures on your property, personal belongings, and liability. You can expect a standard policy to cover the following, for sure:
- theft
- fire damage
- dwelling
- structures on your property
- personal property
- liability
Dwelling coverage is for the physical house itself and any attached structures like a garage or deck. If your home were to burn down, this is the coverage that would reimburse you for rebuilding costs. Most policies cover dwelling protection up to a certain amount, typically between 80-90% of the home’s value.
Other structures include things like a detached garage, shed, or gazebo. These structures are usually covered for about 50% of the dwelling coverage limit. So if you have $250,000 in dwelling coverage, you’d have $125,000 in coverage for other structures.
Personal property protection is for the contents of your home like furniture, clothing, electronics, and appliances. You can often set a dollar amount of the worth of your items and get up to that amount of coverage should anything happen to your personal belongings. Things like art or large appliances or vehicles may need additional coverage separate from your homeowner’s insurance.
Some items that can sometimes be covered under homeowner’s insurance, but are not guaranteed, include:
- mold damage
- roof leaks
- water damage
- tree removal
- fences
- roof replacement
- hail
- wind
What Does Homeowners Insurance NOT Cover?
In addition to the “maybe covered” items above, a standard homeowners insurance will generally NOT cover issues related to:
- normal wear and tear
- lack of maintenance
- code violations
- termites and other pests
- earthquakes
- flooding
You may be able to purchase additional homeowners insurance to cover these things, but they are typically not included in a standard policy. Some states such as North Dakota, however, require residents to add flood insurance if they live in an area that experiences frequent floods. The same goes for Florida residents— they need to add hurricane insurance secondary to their homeowner’s coverage.
What Are Some Insurance Outliers That Homeowners Should Watch For?
What insurance does or does not cover can be easily determined based on the things you have in or around your home. Although slightly confusing at first, it can be pretty straightforward if you just want the basic coverage. Basically, nothing out of the ordinary can be worked through with the help of your insurance company.
However, we see time and time again homeowners who fail to get additional coverage they need that is vital to their wellbeing. For example, to get the actual deductible they need to get adequate coverage and get their money’s worth. We’re going to go through some of the outliers of homeowner’s insurance that could make or break the bank should you ever need to use it.
Ordinance or Law Coverage
Homeowners factor in coverage for ordinance or law: a.k.a., code upgrade coverage. This provides coverage if your house or roof is old and damaged, and will pay to get your roof up to code. There are two types of coverage that fall under ordinance or law (L&O) insurance:
- Cost to upgrade: If your home is fully (or partially) destroyed by a covered event, ordinance or law coverage will help to cover the costs of updating your house to meet current building codes.
- Rebuilding expenses: After a loss, if your home needs to be replaced, repaired, or upgraded, L&O insurance will offer payment assistance to get your home up to snuff and meet current building laws or ordinances.
Why should you get it? It’s super affordable to do and can save you thousands in the long run. Unfortunately, some insurance wants to put a cap on this— either dollar or percentage-wise— so keep an eye out for that.
Varying Deductible Options
Did you know you don’t have to go with the first deductible thrown your way? It’s very important that you don’t just choose a cookie-cutter deductible, but rather choose one that suits where you live, the value of your home, and your overall income.
Choosing the right deducible based on where you live should be around 1 – 2 % of your home. We always recommend getting quotes on both a standard deductible or one based on your home’s value and weighing the cost/benefits— i.e. a $1,000 deductible vs. 2% of your home.
Accidentally Forfeiting Coverage
One of the biggest pieces of advice we offer homeowners is to NOT ignore the annual insurance letters you get in the mail. It’s actually very possible it’s not junk mail. They are often a change to your policy because they are excluding something or making a change. Sometimes it’s even required you respond because a non-response is considered to be forfeiting coverage.
They may also be giving you an option to keep the same coverage or add additional, and it’s your one change. So make sure to read it and talk with your agent to find what is best for you and your home when these come in the mail.
Handling Discontinued Products
Roofing shingles, siding colors, and other home materials get discontinued all the time. Probably even more than you know. So what most homeowners don’t realize is they’ll want to have matching endorsement coverage.
This means they can get coverage for mismatched or discontinued products should they ever need a roof or siding replacement for their old stuff. If one half of your siding is damaged, but the siding is discontinued, you’ll want to have this coverage so you’re not stuck with a bunch of mismatched patchwork.
Often companies will discontinue products without ever letting you know or announcing them. So, it’s important when this happens that you get in touch with your agent or company and ask about getting an endorsement for mismatched or discontinued products.
Tips for Finding the Best Insurance Company
The first thing you’ll want to do is find a reputable company that’s trusted, highly reviewed, and has been a good communicator. The last thing you want is to go with a company that is unreliable and uncommunicative. Some tips for finding a reputable insurance company are:
- Talking to your neighbors. Find out who they get their insurance through and get some recommendations.
- Reach out to multiple companies and ask for standard coverage information. We’re sure it won’t be wildly different, but you can get a good vibe about how much they might be able to get you.
- Read Google reviews! These are a great resource for finding someone trustworthy and that offers the best customer service.
Other tips for getting proper insurance coverage:
- Know the value of your property, belongings, vehicles, etc.
- Have documentation of your land and property lines.
- Get a valid budget in place and know what you can or cannot afford.
- Talk to a few insurance agents who are willing to give you more information. If you find someone reluctant to share info with you, they may not be your best bet.
Final Tips for Getting the Best and Most Accurate Coverage
We know insurance is messy and confusing, especially to the new homeowner, but we’ve got some insider tips that might help you!
Consider Spikes in Repair Costs When Signing Up For Dwelling Coverage
Repair costs won’t always be the same and when you need it most, you’ll wish you had upped your coverage. If you purchased your forever home, chances are at some point it will need repairs, replacement, or some large upgrade— it’s inevitable. So the money you pay now will save you so much more down the line and you can rest easy knowing you have that protection.
Don’t Assume Natural Disasters are Covered
This one is a common myth. Most homeowners insurance covers fires, theft, and severe weather damage but not floods and earthquakes. If you live in an area prone to these natural disasters, it’s important to get the proper coverage to protect your home.
Additionally, Don’t Under Estimate Flood or Hurricane Risk
While you must add floor or hurricane coverage to your insurance policy, you may think “it won’t happen to me”. And this would be a dire mistake. Underestimating the power of nature will come and bite you when the day comes. Follow the “better safe than sorry” mentality in this case and add that coverage.
Get Liability Coverage, Then Increase It
Liability insurance is one of the most important parts of homeowners insurance. This will protect you if someone is injured on your property and decides to sue you. The standard homeowner’s insurance policy offers liability coverage, but we recommend increasing it by at least double. If you have assets to protect, consider getting an umbrella policy for even more coverage.
Document Everything
We stated this briefly before, but make sure you keep documents of everything you own, how much they cost and include photos if you can. Keep this in a safe place like a waterproof or fireproof safe box, or in digital format. In the unfortunate event of a fire, flood, or another disaster, you’ll be happy you have everything documented so you can get the coverage you deserve to preserve your livelihood and rebuild.
Getting Roof Repairs With Homeowner’s Insurance
While we’re not an insurance company, we do know how critical it is when a storm rolls through and you need roof repairs fast. That’s why at First American Roofing & Siding we put a great emphasis on getting you the coverage you need to get the job done, while also avoiding scammers.
We will inspect your home for damage and after a thorough assessment, we’ll provide a comprehensive estimate. Note that you will only have to pay your deductible plus any upgrades in materials. Be cautious of companies offering to pay deductibles, as this is illegal and generally results in a reduction of quality.
To get assistance with your insurance claim and much-needed roof repairs, contact First American Roofing today!
