Owning a home is a major accomplishment, and insurance can protect your financial health and provide for your family in the event of a loss. At Oakley Insurance Group, we provide Arizona homeowners and homeowner's in many other states with the coverage and peace of mind they need. For an in depth look at a homeowners' policy please see our blog article HERE.
Home insurance is important for protecting the place you call home, and the things that make your house your home. Homeowner’s Insurance covers the structure of your home, the property inside the home, provides funds for living if you are displaced, and protects from potential liability that could arise when others are on your property, and even when you're out of your home. Here's what you need to know about basic home coverage. Homeowner's insurance is broken up into five main parts, with other optional coverages available.
Coverage A – Dwelling: is the calculated replacement value of the home, meaning, if the home were to be completely destroyed, this is what it would cost to rebuild it – this is not the “retail” price, or the price including land. Each carrier has it's own algorithm for determining the replacement cost based on accurate information you provide the carrier, but it is your responsibility to make sure the value is sufficient each subsequent year of the policy. Many of the following coverages are based on a percentage of the dwelling amount.
Extended Replacement Cost: Extended replacement cost ties into Coverage A, by adding additional percentage of coverage above the underlying dwelling amount in case the rebuild of your home costs more than the policy amount due to unforeseen circumstances such as cost of materials, labor, or time elements.
Coverage B – Other Structures: covers other structures on the property that aren’t attached to the main dwelling. This could include a shed, a garage, wall, fence, outdoor BBQ, or other similar structures. This coverage starts at 10% of coverage A, but can be increased if needed.
Coverage C – Personal Property: is coverage for items you own in the home that are not permanently attached to the dwelling. Personal property includes but isn’t limited to furnishings, appliances, clothing, electronics, fixtures, etc. One way we like to illustrate this is, if you took your home and turned it upside down, anything that would fall is considered your personal property.
One thing to keep in mind for this coverage is, by default the standard homeowner's policy only provides payment for personal property on an Actual Cash Value (ACV) - or it's value with deprecation based on age and condition. It is important to make sure your policy is endorsed to cover your personal property for it's replacement cost. This means your policy will payout the amount it costs to replace your items for the exact same item new of similar type and value - up to the amount listed for Coverage C. This coverage starts as 50% of coverage A, but can be increased if needed.
Coverage D – Loss of Use: Loss of use coverage is an amount of insurance available to use toward cost of living in the situation that you are displaced by an event that was covered by your insurance. This coverage will pay for a place to stay, food, transportation, and laundry services until your home is suitable to live in again, or you have found a new permanent home. Most policies include this as 30% of the dwelling cost, but can be increased as desired.
Coverage E – Liability: Liability coverage is used to cover yourself on or off your property if you are found liable for bodily injury or property damage to someone sustained from non-business-related activity, such as someone injured during a party at your house, or someone blames you for tripping and falling resulting in injury at the grocery store.
It is important to discuss your coverage requirements and all aspects of your property with one of our licensed, experienced agents before making any coverage decisions. Let Oakley Insurance Group guide and educate you through this process so you have the coverage your home and your family needs for the unexpected life may bring.
Homeowner’s insurance is very customizable, helping to provide coverage for different aspects of the home, and your lifestyle. Insurance options can include but are not limited to the following.
Pet Liability: Pet liability coverage is added to a policy to include legal liability for bodily or property damage to others while on your property.
Water Backup: Water backup is coverage purchased to cover costs for damage by water that escapes from a sump, sump pump, or drain. Escape can mean overflow or discharge. Coverage often includes backup or overflow of water originating off premises if the backup or overflow itself occurs on premises. Clogging of a sewer line is an example of an offsite cause of onsite backup/overflow of water. Water backup does not mean water that leaks from a pipe or drain.
Water Seepage or Leakage: Seepage or leakage is damage from repeated continuous seeps or leaks that occur for a period of fourteen days or more, that occur from water or steam within home systems such as plumbing, heating, air conditioning, and household appliances. This coverage often includes cost for removal of fungi, bacteria, or wet or dry rot, caused by seepage or leakage.
Equipment Breakdown Coverage: Equipment breakdown coverage helps to cover spontaneous and instant breakdown or failure of mechanical and electrical equipment in your home. Many of your appliances can be covered such as your washing machine, dryer, water heater, air conditioning, and similar items. Equipment breakdown does not cover breakdown or failure due to wear and tear, intentional loss, or power surge damage (this is covered differently).
Service Line Coverage: Service line coverage provides coverage for damage or failure to the lines that service your home that you own responsibility for, such as: water line, sewer line, gas line, internet and cable lines, and electrical lines. This coverage often includes repair or replacement using environmentally friendly materials, excavation costs, expenses for expediting the fix, and coverage for outdoor property that may need to be removed or destroyed to access service lines. A service line begins at your front door, the entry into your home, out to the edge of the street or where your responsibility of the line ends. Popular covered causes vary by insuring companies but often include: wear and tear, rust and corrosion, breakdown, freezing or frost, tree or other root invasion.
