A homeowner’s insurance policy should cover the cost of building a new home completely from scratch. Replacement cost usually doesn’t include the land your home sits on.  The insurance agent should be able to accurately calculate the costs to rebuild.  In today’s rising prices- it may not be a bad idea to ensure your coverage is adequate.  Living in Ohio most policies don’t cover earthquake or flood damage- make sure you don’t assume coverage that doesn’t exist.

2. What is liability coverage and do you need it?

Liability coverage protects you against legal actions caused by bodily injury, property damage, or when Fido bites somebody.  The liability portion of your policy should cover both the cost of defending you in court and any court awards—up to the limit of your policy. The good news is you’re not just covered in your home but just about anywhere. Check with your insurance agent on how much coverage you might require.  As a self-employed person- more coverage may be required to protect your assets.

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3. What’s my stuff worth?

A good homeowner’s insurance policy should cover the total cost of replacing all your personal property.  Personal items stolen, destroyed, or burned should be covered. The tricky part is knowing how much coverage you really need.  First-time homebuyers may not have tons of stuff to worry about.  However, as we age and collect “more stuff” the coverage becomes more critical.  Typically, personal property coverage equals about 50-70% of the amount of insurance you have on the structure of your home.  The best way to guestimate is to survey your stuff and figure out values.  Easier said than done.  One suggestion is to photograph everything in your home and save it in the cloud.   Heaven forbid you were to suffer a total loss – at least you can go through pictures and prove what you owned and calculate costs.  One caveat to personal property is covering jewelry and fine arts.  Separate policies are required to cover jewelry ( and get it appraised every so often) and what is considered fine arts.  Fine arts might be artwork, grandma’s china, and crystal, or an antique desk.  Check with your insurance agent on specifics.

4. Do need additional living expenses coverage?

The “Additional Living Expenses” (ALE) clause is found in standard homeowners insurance policies. It covers the costs of living someplace else if your home is too damaged for inhabitants.    ALE is supposed to cover hotel bills, meals, and other expenses over and above your normal living expenses. Additional Living Expenses coverage varies from insurance company to insurance company. Check with your agent on how much coverage and time limitations of your policy.  2021 has produced some significant shortages in the supply chain.  Rebuilding a home after a fire may take more time than normal.

 5.  Combining policies and things to do to lower the price.

Proactive systems like smoke detectors, burglar alarms, and/or dead-bolt locks in your home, often help to lower policy costs.  Add monitored alarm systems often reduce your homeowner’s insurance premium, too. Age and membership in certain organizations may prompt discounts.  Most of us combine auto and home insurance with one carrier which also helps to reduce costs.   Don’t be embarrassed to ask about discounts or incentives.

Final thought- mold is a big issue in our area and it’s a slippery slope with many insurance policies.  Make sure you investigate and understand exactly what is and is not covered by your homeowner’s policy.

Home Owners Insurance is one of those things we don’t think about until we have a claim!