ICA's Homeowners Insurance Guide is a comprehensive guide that helps homeowners understand the complex world of insurance terminology and coverage. This ebook breaks down the jargon used in homeowners insurance policies and explains the different types of coverage available, including dwelling coverage, personal property coverage, liability coverage, and more. Readers will gain a clear understanding of the key terms and concepts used in homeowners insurance, and be better equipped to make informed decisions about their coverage. Whether you're a first-time homebuyer or a seasoned homeowner, this ebook is an essential resource for anyone who wants to protect their dream home and their financial future.
Homeowners Insurance Guide: Key Terms & Coverages
Homeowners insurance is a crucial investment that provides you with financial protection in the event of unexpected damages or losses to your property.
HOMEOWNERS INSURANCE TERMS
DWELLING COVERAGE Dwelling coverage provides coverage to repair or rebuild your home
in the event of a fire, wind, hail, lightning, vandalism, accidental water damage, falling objects (tree limbs), smoke, explosion, or accidental water damage. Should you have a covered loss, the Dwelling coverage pays to repair or rebuild your home up to the policy limits. Also included in the dwelling are an attached garage, attached deck, or porch.
REPLACEMENT COST ESTIMATOR A replacement cost estimator is a tool insurance agents use to determine the cost of rebuilding your home in the event of a total loss. Various factors are used to determine the construction cost – square footage, type of home (2-story, ranch, with or without a basement), how many bathrooms, and what kind of materials are used for the flooring, countertops, siding, and roof. There are many different replacement cost calculators used, and each insurance company may vary slightly.
OTHER STRUCTURES COVERAGE
Other structures coverage are things that are not physically connected to the dwelling: detached garage, fence, shed, gazebo, guest house, and barn. Often, this is a percentage (10%) of the dwelling coverage. More coverage can be purchased if needed.
HOMEOWNERS INSURANCE TERMS
PERSONAL CONTENTS COVERAGE
Personal contents coverage protects your personal items, including furniture, clothing, electronics, and
appliances, not permanently attached to the countertop. If you could turn your home upside down and all the things not permanently attached would fall out – these are the items covered under Personal Contents/Property. Most insurance companies offer 50% to 75% of the dwelling for your personal contents/property.
LOSS OF USE COVERAGE Loss of use coverage , also known as Additional Living Expenses (ALE) coverage, is a type of coverage included in many homeowners insurance policies. It provides coverage for any additional living expenses you may incur if your home is damaged or destroyed and you are forced to temporarily relocate from events such as a fire or natural disaster. The coverage typically covers the additional costs of living away from your home, including meals, lodging, and other related expenses. It can also help to cover the costs of replacing items that were lost or damaged in the incident.
PERSONAL LIABILITY Personal liability refers to the coverage that helps protect you if you are found legally liable for someone else's injury or property damage. It helps protect you financially in the event that you are held responsible for the damage or injury. It also
covers legal fees associated with defending yourself in the event of a lawsuit. Personal liability coverage can be found in a standard homeowners insurance policy. Make sure you have enough coverage to meet your needs.
MEDICAL PAYMENTS Medical payments coverage is intended for someone, not a member of the household, who is accidentally hurt and needs emergency medical treatment (a visit to the ER or an ambulance ride). It is a good faith coverage, and most policies offer $1,000 to $5,000 in coverage. HOMEOWNERS INSURANCE TERMS SERVICE LINE/BURIED UTILITY LINE COVERAGE Service line/buried utility line coverage is an optional coverage providing insurance against unexpected expenses related to damage to your property's underground water /sewer lines and other utility cables. Covered losses include, but are not limited to, wear and tear, rust and corrosion, mechanical breakdown, freezing or frost heave, and tree or other roots. WATER BACKUP Water backup coverage is an optional coverage that can be added to your homeowners insurance policy. It helps protect your home from damage caused by water backing up through the sewers or drains. This coverage can help pay for repairs to your home or for the replacement of items damaged by this water.
HOMEOWNERS INSURANCE TERMS DEDUCTIBLE A deductible is the amount of money that a homeowner is responsible for paying out of pocket before their insurance policy begins to cover the cost of damages. For example, if a homeowner has a $1000 deductible and the cost of damage is $3000, the homeowner would pay the first $1000, and the insurance company would cover the remaining $2000 of the damage. The deductible can be adjusted on most policies to fit your personal needs. A wind and hail deductible is the amount you agree to pay in the event of a claim due to wind or hail damage. This deductible ranges from $1,000 to as high as 2% and is most often separate. WHY CHOOSE AN INDEPENDENT INSURANCE AGENT? Independent insurance agents help homeowners save money on their insurance by offering them a variety of insurance options. They can compare different insurance policies to determine which one provides the best coverage at the most affordable price.
By working with multiple insurance providers, independent insurance agents can negotiate on behalf of homeowners to get them the best possible rates and discounts.
TJ Klassen Independent Insurance Agent
719-528-5400 Ext 109 tj@icainsurance.com
www.icainsurance.com/tj-klassen
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