What every home owner should know about their home owners insurance policy.

Are you considering a new home insurance policy for one of your biggest investments?  Certain things you need to consider that your agent may forget to talk to you about. 

Perhaps one of the biggest things you should be aware of when purchasing home insurance is the internal limits of the policy.  What does that mean?  Well, lets say your home has $100,000 of personal property coverage.  Sounds pretty good right?  Well, it is until you read your policy and start looking at the exclusions and limitation portion of the policy.  One example is jewelry.  You may think that $100,000 applies to all your jewelry right.  Well, not really.  You see, your policy will have language that limits the amount it will pay for jewelry for certain perils.  For instance, most policies say that they will limit coverage on jewelry for theft to $1500.  Some may be a little higher but some may be lower.  So if you have jewelry valued at over $1500, it will not adequately be covered under your home policy unless you schedule it specifically on the policy.  Scheduling jewelry or other valuables on a home policy gives that item a specific amount of coverage.  So your wedding band that is valued at $10,000 is really only covered for $1,500 if it is stolen. 

This kind of limitation can be found on other items like art, firearms, collectibles and more.  You want to review all those things with your agent.  Many agents are so anxious to make a sell that they don’t talk about this stuff with their clients. 

Another issue is liability.  Don’t go with $100,000.  For just a few dollars more you can bump that up to $300,000 or even $500,000.  $100,000 doesn’t cover much these days.

Of course, one of the biggest differences in home policies is ACV or actual cash value versus RC or replacement cost.  You want to make sure your policy has RC coverage.  ACV coverage will subtract out for depreciation when you file a claim and you could be left holding the bag.  Lets say you spend $2000 on a nice flat screen TV and a number of years later it is stolen.  The value of the TV when it is stolen or damaged in a fire has now depreciated to $500.  To buy a new TV of like kind and quality is going to cost you $2000 but your ACV policy is only going to pay you the value of the TV at the time of the loss, $500.  You are out $1500.  While that might not seem like a lot, compound that by 10 times stolen or damaged by fire.  Does $15,000 get your attention?

Lastly for this blog, is Named Peril versus Open Peril coverage on contact.  Did you know if you have a named peril policy, you are only covered for 16 named perils.  That isn’t very many when you consider everything that could damage your contents.  An open perils policy will cover your personal property for everything, unless it is specifically excluded in the policy; this coverage provides you a much broader range of coverage.

If you value your insurance coverage and you want a competitive price, then we want you as a client.  Call 480-981-6338 for a free quote or visit www.insuranceproaz.com for more information.

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