Frequently Asked Questions About Homeowner’s Insurance
Q1: Does my homeowner’s policy cover all storms and severe weather?
Home Insurance is not a “one size fits all” purchase. Depending on where you live, you may be exposed to different kinds of severe weather. Working with a Broker/CSR at DPM insurance Group helps to make sure you choose the appropriate add-ons for weather risks in our area.
A standard homeowner’s policy typically includes coverage for damage caused by lightning, hail and wind – and does NOT offer protection from floodwater or earthquakes. Flood Insurance is a separate policy of its own. Many locations in Windsor-Essex and Chatham-Kent are prone to flooding. In fact, mortgage lenders may require you to carry specialized insurance coverage if you live in a high-risk area.
Q2: Are all of my appliances and personal belongings covered?
Your policy includes personal property coverage to protect your belongings, which includes appliances such as your refrigerator and washing machine. This means your insurer would help pay to repair or replace those appliances if they were involved in a covered incident, such as fire, theft or a power surge. When an old appliance breaks down or has experienced normal wear and tear, the homeowner is responsible for footing the bill.
Many people are also surprised to learn some of their personal property coverage has a per-item limit, which might be set as low as $500 per item. This means certain items which are worth more than your policy’s per item limit need scheduled coverage in order to be fully protected by Homeowner’s Insurance.
Personal belongings which may need scheduled coverage can include:
- Antiques or collectibles
- Jewelry, such as wedding rings
- Smart TVs and other electronics
Q3: Why is the insured value of my home different than what I can sell it for?
The best way to answer this question is to examine the difference between market value and replacement cost:
- Market Valuereflects the amount a home buyer is willing to pay for your property. This figure is influenced by the local housing market and the state of the economy, as well as taxes, interest rates and more.
- Replacement Cost is a calculation of the expense to rebuild your home exactly the way it is now, including labor, similar materials and today’s building code.
If your home was damaged, insuring for replacement cost would help allow you to rebuild the home as closely as possible to the way it was before – instead of the market rate. Remember, it is almost always cheaper to buy an existing home than to build a new one. Underinsuring your home could leave you on the hook to come up with the difference if you need to file a claim in the future.
Q4: What happens to my policy if I complete a renovation?
A renovation will likely increase the value of your home, whether you are adding an extension, finishing the basement or updating the kitchen. You will want to reach out to your insurance broker to make sure the replacement cost on your policy reflects the new value of your home. We discussed this in Question #3 above!
There is more good news: Some renovations may qualify for a discount on your insurance policy. Replacing the roof, installing a water shutoff device and activating a home security system are all considered “smart” upgrades.
On the flip side, certain renovations may require you to take on additional expense. For example, if you build a pool, you may be required to fence the backyard in order to maintain your coverage.
Before you pick up a sledgehammer, discuss the renovation plans with your broker.
There are no silly questions when it comes to your home. The team of talented Brokers/CSRs at DPM Insurance Group is here to help you feel confident in your protection plan. We also know how to ask the right questions to make sure our clients are getting the best customized coverage for the best price. Click here to find the office closest to you: https://dpmins.com/locations/