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Homeowners Insurance 101

Why should I use an Independent Insurance Agent?

Some people think it doesn't really matter where they buy their insurance. But this misconception could be costing them money, service and protection. Buying insurance isn't like buying bread or milk. Insurance is an important safety net for your family, your home, your car or your business. Don't treat the purchase lightly!

There is a difference in where you buy your protection. Many people don't realize there are three sources for insurance:

  1. Captive Agents, who can sell you the insurance of only one company.
  2. Telephone Representatives, who can offer you the insurance of one company, and only on the telephone.
  3. Independent Insurance Agents, who represent an average of eight insurance companies, and research with these firms to find you the best combination of price, coverage and service.
Your Independent Insurance Agent:

  • Is a licensed professional with strong customer and community ties.
  • Gives you excellent service and competitive prices because your agent can access the insurance coverage from more than one company.
  • Unlike other agents, is not beholden to any one company; thus, you don't need to change agencies as your insurance and service needs change. 
  • Assists you when you have a claim.
  • Is your consultant, working with you as you determine your needs.
  • Offers you a choice of insurance plans and programs. * Is a value hunter who looks after your pocketbook in finding the best combination of price, coverage and service.
  • Offers one-stop shopping for a full range of products-home, renters, auto, business, life and health.
  • Can periodically review your coverage to keep up with your changing insurance needs.
  • Treats you like a person, not just another number.
  • Customer satisfaction is the key to an independent agent's livelihood. So, serving you in your independent agent's most-important concern.
What is the difference between actual cash value and replacement cost?

Covered losses under a homeowners policy can be paid on either an actual cash value basis or on a replacement cost basis. When "actual cash value" is used the policy owner is entitled to the depreciated value of the damaged property. Under the "replacement cost" coverage, the policyowner is reimbursed an amount necessary to replace the article with one of similar type and quality at current prices.

Where and when is my personal property covered?

Coverage C (Personal Property) applies to all your personal property (except property that is specifically excluded) anywhere in the world

What is Loss of Use?

If your home in uninhabitable following a covered loss, the insurance company will provide you with Additional Living Expenses. This coverage provides for any necessary increase in living expenses you incur so that your household can maintain its normal standard of living

Is Flood Insurance covered under my homeowner's policy?

No. Generally, loss resulting from flood is not covered by Homeowners insurance, so a separate Flood policy may be in order. This would be especially true if you live in an area prone to flooding. Even if you are not, it is always a good idea to carry flood insurance.

What do I do after a hurricane or fire?

It seems that there should be a disaster-free location somewhere, but news of floods, earthquakes, hurricanes, tornadoes, and fires give cause for doubt. As the shock of disaster wears off, victim's thoughts will turn to collecting on the insurance wisely purchased. First and foremost, notify us of the loss so we can get the insurance ball rolling. If temporary repairs must be made, save the receipts, since insurance may help with the cost. Then begin a list of damaged items; this will be easier if you've already prepared an inventory of personal property before the loss (and secured it at another location, of course!). Don't throw out damaged items that are expensive, such as TVs, furniture, and so on. If the adjuster can see them, the adjustment will move along more swiftly. Attempt to identify structural damage and obtain written bids from reliable contractors. Watch out for fly-by-night contractors who move into a disaster area to prey on its victims.

What are some of the limitations of my homeowner's policy?

This is a very good question. Most people buy homeowner's insurance because "They are required to" . and don't really know some of it's limitations. The fact is there are some things you might want to know.

Your homeowner's policy:

  • Generally limits contents coverage to 50% of the structure's limit (Is this enough?)
  • Covers personal property on the basis of either actual cash value (what you could sell the old couch for) or replacement cost (enough to buy a brand new couch)
  • Contains special liability limits on personal property (Check your policy to see if its provisions are adequate for personal property such as jewelry, furs, silverware, and other items.)
  • Commonly limits coverage on cash, coins, precious metals, tickets, stamp collections, manuscripts, deeds, financial documents, art, and firearms (Business property in the home is limited, too.)
I rent. Do I still need Insurance or is my landlord responsible?

No, The Landlord Isn't Responsible!


Renters may believe their landlord's insurance will cover their belonging for fire and other perils - but this is true only in very limited instances. A Tenant's (Homeowners) policy is the ticket for renters to cover that expensive computer, clothes, furniture, and all the other stuff one forgets about until it's time to move.

Don't overlook the liability portion if the Tenant's policy. It protects the renter against a non-auto claim of negligence by a third party. Such claims can come from any activity: golf, boating, skiing, or slamming the door on your pianist friend's hand. Everyone needs liability protection, whether homeowner or renter.


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