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Homeowners insurance is an insurance policy that protects you financially in the event that your home and property are damaged in a covered peril, or in the event of a covered lawsuit.

Perils that are typically covered by a standard home insurance policy include fire, wind, lightning, hail and theft. While no one plans on losing their home or possessions to any of these perils, it unfortunately happens every day. Ask yourself this: If your home was ever destroyed in a fire, for example, how would you pay to rebuild your home? That's where your homeowners insurance comes in.

Homeowners insurance protects the investment you have made in your home by providing you with coverage for specific hazards.

But your home insurance doesn't stop there. In the event that someone was filing a lawsuit against you for accidental damage you caused to their property, how would you pay for the costly legal fees? Standard homeowners insurance also contains liability coverage that protects you and your family against lawsuits where another party finds you liable for damage to their property or person.

Typically, a standard home insurance policy includes the following coverage:

Standard Home Insurance Coverages
Coverage A – Dwelling
Coverage B – Other Structures on Your Property
Coverage C – Personal Property/Contents
Coverage D – Loss of Use
Coverage E – Personal Liability Protection
Coverage F – Medical Payments
 

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Dwelling coverage (Coverage A) is the portion of your home insurance policy that covers the cost of rebuilding /repairing your home in the event that it is damaged or lost in a covered peril such as wind, hail, lightening or fire. Separate policies are needed for damages and losses caused by earthquake and flood insurance as these are not covered under standard home insurance policies.

The amount of dwelling coverage that you should purchase should be enough to cover the cost of rebuilding your home in the event of a complete loss. Do not confuse this amount with the market value of your home, as the market value includes the value of your land. Remember that in the event of a disaster, your land will not be lost, only the buildings that stand on it. To determine the replacement value of your home please contact your agent.
 

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The replacement cost of your home is how much it would cost to replace your home and its contents with new materials at current prices in the event of a loss. Actual cash value (ACV) is the value of your property at the time of a loss. ACV may be determined as the replacement cost minus depreciation.
 

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You will need enough home insurance to cover the cost of the following:

  1. The structure of your home: To estimate the amount of insurance you will need to cover the structure of your home please contact your agent. 
  2. Your personal possessions: To determine the value of your personal possessions and belongings you should perform a home inventory.
  3. Additional Living Expenses: In the case that your home is damaged and you must live somewhere else while repairs are performed you will need coverage for those costs. A home insurance agent can help you determine the amount of additional living expense coverage you may need.
  4. Liability: Your liability to others for accidents that may happen at your home. A home insurance agent can help you determine the amount of liability coverage you need.

Asking a licensed home insurance agent is always a great way to determine how much home insurance you need. They can help you determine specific coverage levels and discuss appropriate deductibles.


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Generally, homeowner's insurance will cover replacing your home and personal property up to certain limits. Most disasters are covered, but not earthquakes or flooding, and homeowner's policies do not cover the normal aging of your house. Homeowner's insurance also may include liability coverage, which covers personal injuries to other people that happen due to your negligence.

On the declarations page provided by your agent, and within your policy, you will see the various coverage types identified as follows:
  • Coverage A - Dwelling — Pays for damage or destruction to your house and attached structures, such as a screen enclosure or carport.
  • Coverage B - Other structures such as a garage, deck or swimming pool.
  • Coverage C - Personal Property — Covers the contents of your house, including furniture, clothing and appliances, if they are stolen, damaged, or destroyed. 
  • Coverage D - Loss of Use — Pays for additional living expenses if your home is uninhabitable due to a covered loss. Most standard Florida Homeowners Insurance policies pay 10% to 20% of the amount of your Dwelling coverage.
  • Coverage E - Liability — Protects you against financial loss if you are sued and found legally responsible for someone else's injury or property damage.
  • Coverage F - Medical Payments — Covers medical bills for person(s) injured on your property. 

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  • Owners: To protect both your house and personal property.
  • Tenants: To protect your furniture and personal property.
  • Everyone: Protection against liability for accidents that injure other people or damage their property.

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The amount of coverage that you need depends on what it would cost to replace your home in the event of a total loss. The amount of coverage you purchase for your home can best be determined by a licensed and experienced insurance agent. They will calculate your premium based on the size and building type of your home, your liability protection needs and any endorsements or riders that need to be added to your policy.

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Personal Property is the contents of your home and other personal belongings owned by you and family members living with you.

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Regardless of who is at fault, this coverage pays medical expenses for others accidentally injured on your property.
 
  • Medical Payments coverage does not apply to you or members of your family who live with you.
  • Like Personal Liability it also does not apply to injuries arising out of the operation of an auto or from activities involving your at-home business.

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Replacement Cost is the amount it would take to replace or rebuild your home or repair damage with materials of similar kind and quality without any deduction for depreciation.

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Experts recommend you review your policy each time it comes up for renewal. Additionally, it’s a good idea to reevaluate your coverage as a result of the following situations:

  • Following a home renovation
  • When an occupant moves in or out
  • After purchasing a high-end luxury item

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Damages caused by windstorms, hail, hurricanes and tornados are covered in all homeowner's policies. However, some insurers may limit coverage of homeowners residing in hurricane prone areas. Additional coverage may be purchased for accumulating snow or ice may not otherwise be covered. Flood damage is not covered in any homeowner's policy and flood insurance must be purchased separately.

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Your Home Insurance Coverage should match the value of your home. Homeowners insurance cannot cover the land your home is on, only the structure. That means that the insurance amount could be less than the purchase price or loan amount. If you insure your house for $100,000, that´s the most you will get if it is destroyed, even if it would cost more to replace it. The Declarations Page on the front of your policy shows how much coverage you have. Talk with your agent or company representative if you have any questions about your insurance limits.

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If you own a item of specific value, you can add an endorsement, called Scheduled Personal Property (SPP), which acts like a mini-insurance policy on the specified and listed item or add Extended Coverage, which increases protection on jewelry, watches and furs (up to an aggregate limit for all of these items together which is specified on your policy). Both provide all-risks coverage (except for a few exclusions). Many people get extra protection on jewelry, cameras, coin and stamp collections, fine arts, furs, golfing equipment, guns, musical instruments, outboard motor boats, and silverware/goldware.

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You should consider insuring your new home during construction. Otherwise you may be exposing yourself to a great deal of risk if a fire, theft or other event damages or destroys your partially completed home.

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Most individuals with insurance claims receive contact from the insurance adjuster within 48 hours after the claim is reported. The resolution period of a claim will vary, depending upon how extensive the damage from a catastrophe. Generally, the insurance adjuster will schedule a time to meet with the homeowner and adjust the loss.

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It depends on the type of policy you own. But in general, unless you buy additional coverage, you won't be compensated for losses due to floods, earthquakes, nuclear accidents, wars, intentional damage, and normal wear and tear. Other exclusions may also apply.

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Insuring a condominium is different from insuring a house because of the way ownership is structured. A homeowner's policy covers against losses, and you can only suffer a loss if you have ownership. Because there are areas of common ownership in a condominium complex, your homeowners association may have a master policy. The extent of the coverage you buy will depend on what the master policy covers. The standard homeowner's policy for condominiums is called HO-6. It will likely cover your personal property, shield you and your family from some types of liability, plus pay to repair any portion of the unit you own under the terms of the condominium or cooperative documents.

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In general, a homeowner's policy will have a named insured, which is usually the owner or tenant named on the deed or lease. The named insured's spouse is covered as well, even if he or she is not named on the policy declaration. Other users and residents also may be covered to a lesser extent by the personal property and liability provisions in the policy.

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Just like homeowner's insurance, renters face risks of loss. Sure, since a renter does not own the dwelling unit, she does not risk the residence itself. As a renter, the greatest risk is damage to or loss of personal property. Renters can also be liable to third parties that are injured while at the residence. If you rent, insurance acts as a risk transfer device to protect you against a catastrophic loss. In exchange for payment of a premium, you transfer the risk of property loss and liability to third parties to an insurance company.

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Yes. The insurer is entitled to be familiar with the property being insured. Most inspectors will call for an appointment, especially if they want to inspect the inside of your home. If an insurer issues "loss control recommendations" as a result of the inspection, you must make the necessary repairs or changes to make the property insurable and to reduce the chances of loss. If you do not comply with these recommendations, the insurer may cancel your policy.

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Depending on the type of policy, you may be required to pay a minimum premium, or the premium may be fully "earned." In other instances, if you replaced your coverage with a different company, during the policy term, you may be subject to a "short-rate" penalty. You might also have some premium due for recent changes in coverage.

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Replacing your home and your furnishings, clothing and other possessions could be very expensive. Contents replacement cost is a critical part of your homeowners coverage. Why? If your television is stolen, your standard homeowners policy would cover the purchase price less depreciation applied to the stolen set. Under a policy with replacement cost coverage you are covered for the cost to replace the set. You do not have to worry about depreciation or inflation. Most of your personal property may be covered. However, antiques and rare items are subject to the actual cash value provisions of the policy.

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The cost of homeowners insurance can vary tremendously depending on the amount of coverage you purchase and the part of the country you live in. The amount of coverage you purchase for your home can best be determined by a licensed and experienced insurance agent. They will calculate your premium based on the size and building type of your home, your liability protection needs and any endorsements or riders that need to be added to your policy.