Home & Homeowner’s Insurance
Protecting You Against Disasters
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What Is Homeowner’s Insurance?
Home is where the heart is, and it’s also where you do everything that makes life so wonderful. Regardless of your home’s size, Wilson Insurance Services has a homeowner’s insurance plan to meet your individual needs. We offer a range of policies that can be customized with your needs and budget in mind. Contact us today to learn how we can help you create a quality insurance plan that protects your hard-earned home and possessions.
What Does Homeowner’s Insurance Do and Cover?
Like any insurance policy, homeowner’s insurance is designed to provide you financial protection if a natural disaster or something else happens to damage your home and/or property. The standard homeowner’s policy insures the physical structure of your home and its contents. Even external structures like sheds or carports may also be covered. In some instances, coverage can extend to include liability and medical expense coverage if someone is injured on your property.
As long as you have a home mortgage, your mortgage lender will require you to carry a home insurance policy because it helps protect both you and your lender from loss related to unforeseen property damage.
What Kind of Damage Does a Homeowner’s Policy Cover?
There are many things that can damage a home and its contents. These include natural events and disasters such as lightning, hail, floods, and earthquakes – to name a few. Lack of maintenance can also cause damage in a home. However, homeowner’s insurance does not cover all of these things. There are separate policies for flood and earthquake coverage, and insurance will never cover maintenance related damages. The most commonly covered events include:
- Lightning, explosion, fire and smoke
- Earthquakes
- Tornadoes
- Wind and hail
- Hurricanes
- Freezing
Homeowner’s insurance may also cover damage from vehicle crashes, vandalism, theft, and some pets.
What Kind of Injury Does a Homeowner’s Policy Cover?
As a package policy, homeowner’s insurance includes coverage for both property damage and liability. The latter refers to your legal responsibility for any injuries that occur in your home or on your property. Note that this coverage only applies for guests to your home or property – not its regular occupants. Bodily injuries that can be covered by the liability portion of homeowner’s insurance include:
- Slips, trips or falls resulting in injury
- Burns from stoves, ovens, or grills
- Injuries from falling objects
- Swimming pool injuries
- Bites or other injuries from pets
Your homeowner’s liability portion can cover court costs and other legal fees, damages required by a court ruling, medical bills, loss of income, and more. Higher coverage amounts are recommended. The general minimum for liability coverage is $100,000. However, it is best to have $300,000 to $500,000 worth in order to be adequately protected in the face of any unforeseen circumstances.
Why Is Homeowner’s Insurance Necessary?
If something unexpected happens to your home and its contents, homeowner’s insurance is there to help you pick up the pieces. Your home is likely your biggest investment. If disaster strikes and destroys or damages your home, it would take a lot of money to replace or repair what was lost. Homeowner’s insurance protects you financially, keeping the burden of rebuilding or replacement costs off your shoulders.
If your home is damaged by a vandal or valuable contents are stolen by a thief, homeowner’s insurance is there to help in repairing the damage or replacing the items. If a guest visiting your home or property is injured, homeowner’s insurance helps with legal and medical expenses as well as additional costs.
Last but not least, you need homeowner’s insurance in order to secure a loan to finance your home.
Remember that homeowner’s insurance does not cover routine maintenance. Only unexpected loss or damage can be submitted for a claim.
How Much Homeowner’s Insurance is Necessary?
Everyone has different insurance needs, so everyone will need different amounts of homeowner’s coverage. As a general rule, your homeowner’s insurance should be high enough to cover the property and structure of your home and its contents, the liabilities you face from visitors, and the cost of your living expenses if you have to relocate during a rebuild or repair.
How Much Will Cover Your Home’s Structure?
Lenders require you to hold homeowner’s insurance in order to have a mortgage. You may base your homeowner’s coverage amount on the amount of your mortgage, but make sure that it is enough to cover costs of rebuilding your home if it is lost. Your limit should not be based on the price you paid for your home, since its value can change over time. Your rebuilding costs should be based on current construction costs.
If your claim results from a major natural disaster that affected many in your area, the costs of repair or rebuilding may rise with the greater demand. To protect against this, we recommend that you purchase a homeowner’s policy that pays more than its limits or add a clause that guards against inflation.
It’s important to keep your homeowner’s insurance even after your mortgage is paid off. You may no longer be required to have it, but it still protects the investment you’ve made over the years.
How to Determine Amounts for Personal Possession Replacement
The standard amount of personal possession coverage for homeowner’s policies is around 50-70% of the amount you have on your house itself. This may or may not be enough coverage for you. In order to figure it out, you should make a personal inventory of everything you own, including the cost of replacement. When you add all the numbers up, if the total cost is higher than 70% of your structural coverage for your home, you may want to raise the amount for your personal possessions. If you insure your possessions at actual cost (which is roughly 10% less) instead of replacement cost, you’ll save some money on your premiums but may not have enough coverage to replace your possessions, should it come to that. It’s for this reason that we recommend insuring your personal possessions at replacement cost.
Consider Your Living Expenses for an Emergency Situation
Your homeowner’s insurance also provides coverage for your living expenses in the event that you must temporarily leave your home while it is repaired or rebuilt after a storm, fire, or other insured event. Living expenses coverage can include hotel stays, restaurant bills, and various other expenses you wouldn’t otherwise have had if you were still in your home. If you rented part of your home, another covered expense may be reimbursement for the rent that you would have been getting from your tenant(s).
Many homeowner’s policies provide living expense coverage equal to 20% of the coverage on your house. There are some companies that provide policies with unlimited living expense coverage for a limited amount of time.
How to Determine Amounts for Personal Possession Replacement
It’s important to make sure you have the correct amount of insurance before you ever need to use it. Your independent insurance agent here at Wilson Insurance Services can help walk you through the process, but here are some things you need to be prepared to consider:
- The cost of rebuilding your home and replacing your possessions if they are damaged or destroyed
- The discounts that may be available to you, including security system, multiple policy, and fire resistance discounts
- Factors that will affect the cost of rebuilding your home in the event of a disaster, including:
- Local construction costs
- Your home’s square footage
- The home’s style and age
- The way the home was constructed
- The number of rooms
- The type of roof
- Any unique or special architectural details or features
- Any custom-built rooms or features in the home
- Any renovations or additions made to the home
- Other structures on your property, like a garage or shed
Do you want the best rates and best
coverage for homeowner’s insurance?
Talk to a Wilson Insurance Services agent today so we can match you with the
best homeowner’s insurance rates in North Carolina.