Home and Renters Insurance

Introduction to Homeowners Insurance
 

This guide was designed to give you a better understanding about the kind of homeowners and renters insurance that is best for your client In order to best protect their family, home, and possessions, it is wise to take the initiative to fully understand homeowners or renters insurance policy. While it is difficult to predict future losses, you can help minimize the impact by familiarizing yourself with the policy and how it specifically addresses your client’s needs in the event of a loss.

Take the lead in shopping for and understanding the insurance policy. Make sure to compare prices, policy coverage and conditions. Also, research the coverage options that are available to your client. It is always wise to compare policies on your own to help determine the best product for your client.

What Is Covered By Homeowners Insurance?
 

The homeowners policy contains two sections. Section I provides property coverages (A, B, C and D) while Section II provides liability coverages (E and F). A brief description of the individual coverages follows:

  • Coverage A — Dwelling – This coverage provides major property coverage that protects your house and attached structures if it is damaged by a covered peril.

  • Coverage B — Other Structures – This coverage provides protections to other structures on the residence premises that are not attached to the dwelling. Items covered include detached garages, tool sheds, etc. Coverage B is normally limited to 10% of the coverage A limit. However, you may purchase more coverage for an additional premium.

  • Coverage C — Personal Property – This coverage provides protection for the contents of your home and other personal belongings owned by you and other family members who live with you. Coverage C is normally 50% of coverage A or is subject to an established amount agreed upon by you and the insurance company.

Coverage is limited on certain types of property that are especially susceptible to loss, such as jewelry , antiques, furs , collectibles, fine arts , firearms, silverware & money .

  • Coverage D — Loss of Use – This coverage will help with additional living expenses if your home is damaged by a peril insured against to the extent that you cannot live in your home. These expenses include, but are not limited to, housing, meals and warehouse storage. Coverage D is normally limited to 20 percent of Coverage A.

In the event of a loss it is important that you keep receipts for all additional living expenses and submit them to your company for reimbursement consideration.

  • Coverage E — Personal Liability – This section of the homeowners policy will provide coverage in the event you or a resident of your household are legally responsible for injury to others. Coverage E normally provides a defense and will pay damages, as the insurance company deems appropriate. There are some exceptions. The liability coverage will not protect you in all situations, such as an intentional act. All of the exclusions and specific language can be found in your policy.

  • Coverage F — Medical Payments to Others – This coverage pays for reasonable medical expenses for persons accidentally injured on your property. For example, if a neighbor’s child is injured while playing in your home, the medical payments portion of your homeowners policy may pay for necessary medical expenses. Medical payments coverage does not apply to your injuries or injuries of those who reside in your household. It is not a substitute for health insurance. Business activities are also excluded. All of the exclusions and specific language can be found in your policy.

Typically covered by a homeowners policy if damage is caused by:

  • Fire or lighting

  • Windstorm or hail

  • Explosion

  • Riot or civil commotion

  • Aircraft

  • Vehicles

  • Smoke

  • Vandalism & malicious mischief

  • Theft

  • Volcanic eruption

  • Falling objects

  • Weight of ice, snow, sleet

  • Sudden & accidental water damage

  • Breakage of glass

Perils Generally not covered by a Homeowners Policy if Damage is caused by:

  • Flood

  • Earthquake

  • Earth movement

  • Termites

  • Insects, rats or mice

  • Water damage cause by seepage or leaks

  • Losses to house vacant for 60 days or more

  • Mold

  • Wear and tear or maintenance

  • War

  • Insurrection

  • Tidal wave

  • Neglect

  • Nuclear hazard

Important: Read exclusions in your insurance contract.
 

Earthquake, flood, mold, earth movement, and “wear and tear” are some of the perils that are usually excluded. When an insurer writes a homeowners coverage, the insurer is legally obligated to offer you earthquake coverage for an additional premium. The earthquake coverage may be written directly by the homeowner’s insurer, by a separate insurer, or through the California Earthquake Authority (CEA).

You may elect to buy specialized homeowners coverage that provides additional protection for your dwelling and contents beyond the standard coverage limitations in most homeowners policies. Ask your insurance agent or broker about available endorsements to extend coverage. Endorsements to coverage, such as building code upgrade, can greatly add to your protection in the event of a loss.

Introduction to Renters Insurance
 

News reports of apartment fires often include tragic stories of renters who have lost everything because they weren’t insured. Landlord does not provide insurance for personal property. Having all your personal possessions destroyed in a fire or other insurable event, without coverage, is a tragedy that does not have to happen.

To protect those belongings, consider purchasing renter’s insurance, also known as “tenant’s insurance.” The renter’s policy may be used to provide coverage for personal contents located in the property that you occupy. Coverage is also provided for loss of use, personal liability protection and medical payments to others.

Coverage generally Provided under a Renter’s Policy:

  • Coverage C – Personal Property – An amount, designated by the insured, subject to a minimum as determined by your insurance company

  • Coverage D – Loss of Use – 20% of Coverage C

  • Coverage E – Personal Liability – Generally subject to a minimum of $100,000

  • Coverage F – Medical Payments to Others – Generally Subject to a minimum of $1,000

 

The “contents” limit is generally around 50% of the dwelling amount; however, this is a guideline only, as the most reliable source of information on the replacement value of your personal possessions is you. Be sure to take into account all of your personal property when calculating the contents limits. Read and understand the limited coverage amounts for specific types of personal property such as:

  • Jewelry

  • Firearms

  • Fine arts

  • Computer hardware and software

  • Silverware

  • Business personal property

  • Antiques

  • Money

  • Collectibles