Coverage

Why buy home insurance?

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

How much home insurance do I need?

• Property protection: The better the coverage, the less you will have to pay out of your own pocket if disaster strikes.
• Self-protection: You need enough liability coverage to protect yourself from lawsuits resulting from your negligence.
• Lender requirements: Your lender may require you to cover the house for at least the amount of the mortgage. This may be either too little or too much coverage for your individual circumstances. You are not required to purchase insurance from the insurer recommended by your lender.
• Policy requirements: Insurers may impose some coverage requirements for replacement cost protection.

What is the difference between the "replacement cost value - (RC)" and the "actual cash value - (ACV)" of my property?

• Replacement cost coverage pays to replace your home and belongings with materials of “like kind and quality” at current prices. Actual cash value policies reimburse the depreciated value: Replacement cost value minus depreciation = actual cash value.
• A replacement cost policy will usually cost more. Some companies do not offer replacement cost coverage.

I rent a home. Why do I need to purchase insurance?

Tenant insurance offers renters coverage similar to homeowner insurance. It is normally a special "package" that combines coverage for personal liability, premises medical coverage, additional living expense, and personal property (contents) coverage. Tenant insurance does not cover the building but may have a provision to cover tenant improvements.

• Who can buy tenant insurance?

  Tenant insurance is for those who rent their living quarters, for instance, apartment, single family home, or multi-family residence – duplex, triplex, or quad etc.).

• Are there personal property (contents) limitations that you should know about?

  Yes. The following is a list of some, but not all, of those items that typically have specific dollar limitation: money, securities, watercraft, trailers, jewelry, silverware, gold-ware, pewter-ware, and business property. Be sure to talk to your agent about items with specific limitations.

• Is there other coverage that can be purchased with the renter’s policy?

  Yes. The following is a list of some, but not all, of the typical endorsements available:

  • Full value contents coverage (also called replacement cost coverage).
  • Scheduled personal property (to insure jewelry, furs, cameras, musical instruments, silverware, guns, fine art, postage stamps, coin collection and some sporting goods).
  • Increased limits for business property.
  • Business merchandise coverage.
  • Volunteer coverage.
  • Outboard motor liability.
  • Incidental business liability
    .
• Will the landlord's insurance coverage pay for my property if the building burns down?

  No. The landlord generally buys insurance coverage to protect his/her interest (i.e., the building, loss of rents, liability, etc.).

• What should I consider when buying tenant insurance?

• Always compare the coverage offered and the price. Policies can vary from company to company, and so can the price. Shop for the best coverage at an affordable price for you.
• Consider replacement cost coverage. The standard policy covers the actual cash value of your contents (i.e., used value) at the time of loss. The replacement cost coverage will pay the actual cost to replace your property with a like kind and quality product. You must actually replace the product in order to receive the replacement cost.
• Some catastrophic losses such as earthquake and flood are not covered under the tenant policy. You may be able to purchase these coverages through an endorsement or the National Flood Insurance Program (NFIP).
• Some companies will offer tenant insurance only if you are currently doing business with them, such as having existing automobile coverage.
• Check your contract with the landlord. The landlord may require you to carry specific limits of insurance for specific coverages. The landlord also may want to be named as an additional insured on your tenant policy.