As a homeowner, one of the most important aspects of your home isn’t something you use daily. And it isn’t something flashy you show off to friends. It’s your homeowners insurance policy, and it protects you in more ways than you may think, helping you rebuild your home or repair damage that results from a covered loss.
But, that’s not all. It can also help cover the costs of a lawsuit, help you pay for somewhere else to live when your home is uninhabitable, and much more.
Home insurance is typically very comprehensive, but all policies have exclusions and coverage limits. It’s vital to know what those are so you know what’s covered and what’s not. Fire damage? Typically covered. Flood damage? Typically not.
With this guide, you can begin to understand what a typical home insurance policy covers. Just keep in mind that coverage varies from carrier to carrier, region to region and even policy to policy. Only your individual home policy can tell you the coverage you have and that which you don’t. For an even better understanding of your home policy coverage, review it with one of our agents.
What Home Insurance Covers The typical homeowners insurance policy has six types of coverage. They are commonly known as:
Remember that, despite having all of these different types of coverage, you’re only covered up to the dollar amounts that you select and only for covered losses, as outlined in your policy. Typically, you can change these policy limits at any time if you’d like to purchase more coverage. This is a good idea if, for example, you’ve recently added on to your home, acquired some pricey personal belongings or made other updates to your property. If needed, you can also reduce your coverage, though always ensure you are adequately protected.
What Home Insurance Doesn’t Cover
It’s just as important to know what your homeowners insurance doesn’t cover as it is to know what your home policy does cover. For starters, your policy does not cover any damage or repairs costing less than your deductible. It also does not cover any costs that exceed the coverage limits outlined in your policy. You are solely responsible for excess costs, unless you have an umbrella policy to provide additional liability coverage for a covered loss.
More than likely, your policy also does not cover routine maintenance and repairs, as well as damage due to animals, termites, floods, earthquakes, sinkholes, sewer backups, and other incidents. These are often considered non-covered losses. If you experience a non-covered loss, as outlined by your policy, you will be responsible for the costs.
What Home Insurance May Cover
Outside of the typical home insurance coverage, optional or separate coverage may be available from your carrier or from a different carrier. For example, you may be able to purchase earthquake or flood coverage separate from your homeowners policy.
Other coverage options are add-ons to your existing homeowners insurance. These can include identity protection and equipment breakdown coverage, which covers the cost to repair or replace a range of appliances and other equipment, such as pool equipment, in your home. If this sounds similar to an extended appliance warranty, it is. The difference is that you can insure an array of appliances at once through this optional coverage rather than purchasing a separate warranty for each one.
This guide is a starting point for understanding your home insurance policy. Your own policy may vary greatly from the descriptions above depending on the state where you live, your carrier, and the coverage you have selected. So take a close look at your policy by reviewing your documents or viewing your coverage online. Or, even better, sit down with one of our insurance agents who can explain your coverage in detail, as well as discuss whether your policy provides adequate protection for your home, property, and belongings.
Reposted with permission from the original author, Safeco Insurance®.
You devote months to planning, working out every detail for what should be a perfect event. Unfortunately, even the best planned events are at the mercy of the unexpected. Like a flood that ruins your venue. Or a caterer who inexplicably goes bottom up. And chances are, you'll still be on the hook for all or most of the costs. Thankfully, special event insurance can help protect what you've invested in your event should the unexpected put a dark cloud over your big day.
WHAT IS SPECIAL EVENT INSURANCE?
Special event insurance helps cover financial losses that may occur when an accident, extreme weather, illness or a problem with a key vendor puts a stop to your private event. Policies often cost less than you might expect and typically offer two types of coverage:
Event cancellation coverage reimburses you for lost deposits and other charges when unforeseen circumstances cause you to cancel or postpone your function. This type of coverage may extend to special gifts, attire (lost wedding bands, for instance) and damaged photo and video files. It does not, however, cover a change of heart.
Event liability coverage helps protect you from financial loss if you're held responsible for an accident that hurts someone or causes property damage at your event. You may even be covered if one of your guests creates havoc. Many venues now require you to have liability protection before you can even book there.
WHAT TYPES OF FUNCTIONS ARE COVERED?
Events that are covered by special event insurance include but are not limited to:
WHEN SHOULD I BUY SPECIAL EVENT INSURANCE?
It's a good idea to purchase a policy as soon as you begin making deposits, because unexpected issues can crop up at any point. That said, you need to buy event cancellation coverage at least 14 days before your function date and liability coverage at least one day prior. You can buy both up to 24 months in advance.
No one wants to think about something unpleasant when planning an important day, but it's nice to know there's a policy that can help protect you from the unexpected.
Call Theodore & Associates today to talk about how you can help safeguard your big day!
That oh-so-covetable experience of taking a dip in your very own pool? Millions of American households enjoy it, at least when the weather’s nice.
With the summer heat ratcheting up, you may be coming down with a serious case of pool envy, obsessed with having a pool right outside your door for cooling off and entertaining friends. A swimming pool can even increase the value of your home. But, will it increase your homeowners insurance rates too?
Before you dive in and add a pool to your property or buy a home that already has one, here are three important things to keep in mind:
Above all, ask us questions. Against which risks is damage to my pool covered? Is the pump covered too and under what circumstances?
Working closely with someone who understands your property and the local zoning laws is one of the best ways to fully understand how a pool may affect your homeowners insurance rates. We can help you find the right balance of coverage for your specific situation and help ensure your relaxing oasis isn’t an unmanageable risk.
Looking for a Homeowners Insurance quote?
Contact us to get the coverage that’s right for you, whether you have a pool or not!
For more information, visit Safeco Insurance®.
Home improvement: It’s a never-ending process for many people, and for those of us who aren’t necessarily handy, it can be a hassle, too.
But there are plenty of simple maintenance tasks and other improvements you can handle to make your home safer – whether you’re handy or not. And you won’t have to break out the power tools (or any tools at all in some instances) or worry about getting in over your head.
You need running water in your home – but not water running in your home, if you know what we mean. Even minor leaks can cause major problems, from higher water bills to damage requiring costly repairs (maybe even the kind you can’t tackle yourself). Here are some easy ways to make sure your water stays where it should:
Keep Your Family (and Your Guests) On Their Feet
Millions of Americans – many of them older adults – are injured in falls each year. About 2.5 million were hurt in 2013 alone, according to the National Safety Council and the Centers for Disease Control and Prevention. Look around your home. Should you make some of these fixes?
Give Everyone Some Air
Pollution isn’t just an outside thing – the air in your home can be unhealthy, too. But helping people breathe a little easier isn’t hard when you follow these steps:
Home improvement doesn’t have to mean a kitchen remodel or finishing the basement. Making your home safer, in fact, just might be the best improvement of all.
Reposted with permission from the original author, Safeco Insurance®.
Everyone knows why life insurance is important, but many of us choose to ignore the reality of what would happen if we were to die suddenly without the proper protection. The results could be devastating for your surviving family members, leaving them with a large bill for your final expenses, or even worse, loss of the family home because they can no longer cover the mortgage.
If you don’t currently have a life insurance policy, you are not alone. According to Life Insurance Statistics and Facts, which is a report put out by the life insurance industry, about 43% of the population don’t own a life insurance policy in any amount. Unfortunately, the study found that most of us are in desperate need of a life insurance policy. Nearly 1/3 of Americans would feel the loss of the primary earner in the household within the month.
We gathered a few stories to highlight the importance of life insurance. While these stories are fictional, they are based on very common situations.
Mary and Steve have a 24-year-old daughter named Amy who took out $150,000 in private student loans to fund her law school degree. Her parents co-signed the loans, wanting to give Amy a shot at her dream career.
Amy graduated from law school, joined a great law firm, had a baby and started paying off her student loans. When she died at the age of 34 from breast cancer, her parents suddenly became responsible for about $120,000 (the balance on her loans) and their 2-year-old granddaughter.
Because they co-signed the loans, Mary and Steve were responsible for repaying the loan balance. In some cases, the loan documents may include an acceleration clause that will bring the entire balance due at death. Mary and Steve could not afford to pay off the loan and had to sell their own home to settle their daughter’s debt.
While no parent ever wants to take out a life insurance policy on their own child, if you have co-signed their loans, and paying off the balance of those loans would be financially devastating; a life insurance policy can protect you from financial ruin.
A 30-year term life insurance policy on a 25-year-old woman (Amy’s age when she graduated from law school) would be very affordable and would have saved the day for Mary, Steve and their granddaughter.
1. Insurance Through Work Isn't Enough
Scott and Trish were happily married with two kids. Scott had a great job that he loved and was pulling down $150,000 a year. His employer provided two years' salary in life insurance, which Trish (who handled the finances) thought was sufficient until she talked to a friend of hers who was an insurance agent.
Her agent friend warned her that any coverage through work is always a nice bonus, but it’s never a good idea to rely on it. In the event that Scott were to quit, be fired or be laid off, his life insurance coverage would go away, leaving them completely exposed, and if 10 years had gone by, coverage would be much more expensive because Scott was now 10 years older.
Most insurance experts recommend keeping your life insurance separate from any coverage offered by work. Consider work-related life insurance icing on your insurance cake.
Trish took her friend's advice, and purchased a $750,000 term life insurance policy with a 25-year term. This coverage level would give her enough money to pay off their mortgage, put the kids through school and give her a bit of breathing room if the worst were to happen to Scott.
2. Don’t Leave Your Kids Holding the Bag
Kelly, a single mother, always thought it would be a good idea to buy life insurance to protect her children, but something always seemed to get in the way. Money was tight, or time was tight and she just never got around to it.
Years later, Kelly purchased a small home; her daughter was then 18 years old and her son was 14. While she didn't exactly live paycheck to paycheck, her budget was pretty tight and didn't allow her much room for savings.
One night while driving home from work, Kelly was struck head-on by a distracted driver. She died instantly. While Kelly’s children were forced to deal with the tragic loss of their mother, they also had to face the fact that she left behind only a few thousand dollars in the bank and no life insurance, leaving them essentially broke after covering the cost of a very basic funeral.
That is why life insurance is important. Nobody knows what is coming around the corner. If you die unexpectedly, you can leave your spouse or children in a very tight spot.
Term life insurance is extremely affordable. A 20-year policy with a death benefit of $500,000 for a healthy female can cost as little as $25 a month.
3. Life Insurance Can Save a Business If a Key Employee Dies
John started a tech company when he was 20 years old. Over the years he grew it into a multi-billion business that was consistently on the cutting edge of technology, introducing many industry-disrupting inventions. Even though John now employed thousands, he was very hands-on and had personally come up with most of their major breakthroughs.
John’s board of directors was concerned that if something happened to John, the company would suffer a tremendous financial loss. The board felt that a key man insurance policy was needed. A key employee life insurance policy is put in place to protect a business from losses if an invaluable employee dies.
The company decided to take out a very large life insurance policy on John, over his strenuous protests. John felt that he was in fine shape and would live to a ripe old age. Unfortunately, John was wrong. He suffered a major heart attack and died a few years after the policy went into effect.
Sales and the stock price immediately plummeted after his death, and the death benefit from the life insurance policy kept the company afloat for the next 12 months while the new CEO rebuilt investor trust and got the company back on track.
4. Stay-at-Home Parents Need Insurance Too
Mike and Stacy have been married for ten years, and for most of that time, Mike has been lucky enough to stay home with the kids while Stacy has been the primary breadwinner. While Stacy earns a good living, she would struggle to cover the cost of a nanny or other childcare provider if something were to happen to Mike.
Mike provides a variety of services to the family. He takes care of childcare, transportation, managing the household and their finances. He also deals with repairs and maintenance for their home. Mike also earns a small income doing handyman services around the neighborhood.
They decide that in the event something happened to Mike, a life insurance policy would ensure that Stacy would have enough money to hire the necessary help or take a few years off to stay at home as the family learns to cope with the loss.
Sarah purchases a 20-year term policy with a death benefit of $750,000 that will give her the financial means to replace the services Mike provided for the family as well as cover the cost of sending the kids to college.
5. Life Insurance Can Ensure Your Business Survives
Todd and Chris started a business together and over the years it grew into a successful enterprise. Their financial advisor recommended using whole life insurance policies to make sure that if one partner died, their family would be taken care of, and the business would survive the loss.
Todd purchased a $1 million whole life policy on Chris (and made the payments) and vice versa. Years later Todd was killed by a drunk driver. Chris received the death benefit from his life insurance policy on Todd, which he used to buy Todd’s share of the business from Todd's family.
This arrangement allowed Todd's family to be fairly compensated for his half of the business, while also allowing the business to survive without taking the major financial hit of paying off Todd's family.
This is called a buy/sell agreement and is a fairly common arrangement for small business partners.
Top Reasons Why Life Insurance Is So Important
Hopefully these stories have shown you just how important life insurance and "insuring your love" is for the special people in your life. If you still have doubts, here are some reasons why life insurance is a necessity, not an option:
Where Can I Get Life Insurance?
If any of these stories struck a chord and you are considering a life insurance policy, you are in the right place. Theodore & Associates can help you assess your specific risks and financial goals before recommending a policy. Whether you need a term policy, a permanent policy or a combination of both, our agents will do all of the legwork for you, gather quotes, and present you with a variety of options that will provide the protection that you and your family need.
Start protecting your family today, contact Theodore & Associates now.
For more information, please visit Trusted Choice here.