Homeowners Insurance Brochures
- Homeowners: Protect both your house and personal property.
- Tenants of Rental Properties: Protect your personal property.
- All parties: Protection against liability for accidents that injure other people or damage their property.
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- You Need Home Insurance
Homeowners need to purchase home insurance to protect their homes and personal property. Tenants need insurance to protect their furniture and other personal property. Everyone needs protection against liability for accidents that injure other people or damage their property.
- Decide How Much Coverage You Need
The better your coverage, the less you will have to pay out of your own pocket if disaster strikes. In some cases, your lender decides how much coverage you need and may require you to buy a policy that covers at least the amount of the mortgage. It is important to note that the amount of coverage you buy for your house, contents and personal property will affect your cost.
- Compare Deductibles
The deductible is the amount you have to pay out-of-pocket on each claim and applies only to coverage on your house and personal property. Make sure when choosing a policy that you are comfortable paying the deductible if you make a claim. Remember, a policy with a $100 deductible will cost more than one with a $250 deductible. Higher deductibles may be available at a reduced price.
- Replacement Cost or Actual Cash Value?
You have the option to choose to insure your home and belongings for either replacement cost or actual cash value. Replacement cost is the amount it would take to replace or rebuild your home or repair damages with materials of similar kind and quality, without deducting for depreciation. It is important to insure your home for at least 80 percent of its replacement value. Actual cash value is the amount it would take to repair or replace damage to your home after depreciation.
- Shop Around Before You Buy
You are not required to purchase insurance from the company your lender recommends. There are a number of unbiased sources available to find out what different insurers charge for identical products and services.
- Ask Your Agent About Discounts
In some states, insurers offer lower prices for such things as insuring your home and car with the same company, installing deadbolt locks or alarm systems or replacing the roof.
- Basic Coverages Available
Whether you own or rent, there are different packages of home insurance offered to protect your home and belongings. Each package protects against a specified number of events that cause damage to property, such as fire, windstorm and theft. In addition, each package policy usually contains four additional types of coverage: property damage, additional living expenses, personal liability and medical payments.
- Where to Shop
Check the newspaper and yellow pages of the telephone directory for companies and agents in your area. In addition, ask your neighbors, relatives and friends for recommendations on insurance companies and agents. Remember to shop around to get the best price and service.
- Read Your Policy Carefully
You should be aware that a home insurance policy is a legal contract. It is written so that your rights and responsibilities, as well as those of the insurance company, are clearly stated. When you purchase home insurance, you will receive a policy. You should read that policy and make certain you understand its contents. Keep your policy in a safe place and know the name of your insurer.
- Review Your Home Insurance Needs Every Year
Check with your insurance agent at least once a year to make sure your policy provides adequate coverage. The addition of a room, new insulation or remodeling add value to your home and, therefore, may increase replacement cost.
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Enough to cover:
- Your Property and Belongings: The better your coverage, the less you will have to pay out of your own pocket if disaster strikes.
- Self Protection: You need enough liability coverage to protect yourself from lawsuits resulting from your negligence or events that could occur on your property.
- Lender Requirements: Your housing lender will require you to cover the house for at least the amount of the mortgage or the replacement cost of the dwelling.
- Policy Requirements: Insurers may impose some coverage requirements for replacement cost protection. Preferred plans usually require policy limits at 100% of replacement cost. Standard plans usually require policy limits of at least 80% of replacement cost.
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The following are examples of the types of coverage that are usually listed in your insurance policy. A brief description is also included. These are only examples.
PLEASE READ YOUR POLICY TO KNOW YOUR COVERAGES.
- Coverage A: Damage to House
Covers damage to the house. The face amount of the policy (for example, $100,000) is the most you will receive if your house is totally destroyed.
- Coverage B: Other Structures
Covers damage to other structures or buildings, such as a detached garage, work shed, or fencing.
- Coverage C: Personal Property
Covers damage to or loss of personal property. Personal property includes household contents and other personal belongings used, owned or worn by you and your family. See section on extras for personal property that may need added coverage.
- Coverage D: Additional Living Expenses
Covers additional living expenses when incurred. This means that the policy covers the necessary living expenses up to the stated limit, incurred by the insured, to continue as nearly as possible the normal standard of living when the house cannot be occupied due to a covered loss.
- Coverage E: Comprehensive Personal Liability
Covers personal liability. This coverage protects you against claims arising from accidents to others on property that you own or rent. With a few exceptions, such as auto or boating accidents, it is an all-purpose liability policy which follows you wherever you go.
- Coverage F: Medical Expense
Covers medical expenses. Coverage is limited to a specific amount per person and per accident for injuries occurring on your premises to persons other than an insured, or elsewhere, if caused by you, a member of your family, or your pets. An important feature of this coverage is that payment is made regardless of legal liability.
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Like auto insurance, the cost of homeowners coverage depends largely on where you live. Crime rates vary from community to community and so does access to your local fire department, police department, and water supply. These factors help determine the protection class. Along with the value of your house, the following factors determine the rates you pay for homeowners coverage.
- Type of Construction: Frame houses usually cost more to insure than brick houses.
- Age of House: New homes may qualify for discounts. Older homes may not qualify for preferred programs. Insurers may require older homes to have updated heating, plumbing, wiring and roofing.
- Local Fire Protection: Your home’s distance from a fire hydrant and the quality of your local fire department determine your fire protection class.
- Amount of Coverage: The amount of coverage you buy for your house, contents and personal liability will affect the price you pay.
- Deductible Amount: Your choice of a higher deductible will reduce the price for homeowners insurance.
- Discounts: Insurers offer lower prices for such things as insuring your home and car with the same company and installing dead-bolt locks or alarm systems.
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- Extra Contents Coverage
Remember that most of the coverages are a flat percentage of the amount of insurance on the home itself. For example, contents coverage is 50% of the insurance on the home itself. If you insure your home for $100,000, the contents coverage will be $50,000. For a minimal extra charge, you can increase the coverage on your contents without increasing the amount of insurance on the home itself.
- Replacement Cost
Most companies offer "Guaranteed Replacement Cost Coverage" for an additional premium. Ask your agent if this is available and to explain the advantages of having this broader coverage. The most important coverage that is usually offered is full replacement cost coverage on your roof with no deduction for depreciation.
- Personal Property Extensions of Coverage
Another good example concerns special limits on certain types of personal property. For example, most policies limit their coverage for the theft of furs or jewelry to $500.The limit for firearms or computers is probably $1000. Numerous other items are also typically limited to $500 or $1000 since the homeowners program is designed to fit the coverage needs of the average insured. It is the consumer's responsibility to review the limitations placed on certain types of property. If needed, increase the coverage of one area or another by adding a "Scheduled Personal Property Endorsement" to the basic policy.
- Additional Liability
You can also purchase additional liability coverage and medical payments coverage for a nominal premium.
- Flood Insurance
The most important exclusion is flood, as many people have learned to their great misfortune. If you need flood coverage, any property/casualty insurance agent can help you get it. If you live in a flood-prone community, don't risk going without flood insurance. See your broker about flood coverage.
- Earthquake Insurance
No standard insurance policy, including the homeowner's policy, covers catastrophic damage that can be caused by an earthquake. For an additional premium, companies offer an earthquake endorsement with your homeowner's policy that will protect you in case your home suffers earthquake damage. In some areas, this coverage is typically inexpensive and should be considered. For instance, fault lines run through South Carolina, an area not perceived as having earthquakes occurring frequently.
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Print and complete the Consumer Complaint form below and return to the Department of Insurance.
Consumer Complaint Form [pdf 26k]