About Homeowners Insurance (HO3)
A Homeowners Insurance policy covers several things: damage to the home and the owner’s belongings, certain legal claims against the owner for which he may be liable, and limited coverage of people who are injured on the owner’s property. This package policy typically provides coverage options for a broad variety of risks on the home; however, some risks, such as earthquake and flood, are excluded. The policy also does not cover land.
If you own a townhouse, you may need to purchase a Condominium policy. This is determined by whether you own the exterior walls to your unit. It can be confusing trying to determine which policy suits your needs, so contact your homeowners association, and talk with your Bankers agent.
Understanding Your Risks and Coverages
Before you get a Homeowners policy, it is important to understand the risks you face so you can make the best choice to get the right policy at the right price. We’re going to introduce you to your risks in an entertaining way through “Meet the Risks.” But another “risk” you face is in buying either too much or too little insurance. Avoiding that potential hazard is the main reason we created Build Your Own Policy!
Bankers Helps You Prepare for the Risks You May Face
Simply put, risk management is the process of, first, identifying the risks you face as a homeowner and, second, figuring out ways to minimize – or manage – them. There are nine major risks that face homeowners and some or all may apply to you, depending on where you live:
To learn how to protect your home, yourself and your family from these risks visit Insurance 101.
A deductible is the amount of out-of-pocket expense for which you are responsible before the insurance coverage begins.
- You can lower your premium by increasing your deductible.
- Most Homeowners insurance policies include a “$500 All-Other-Perils (AOP) Deductible.” This deductible applies to all losses except where special deductibles—such as Hurricane, Named-Storm, or Windstorm Deductibles–apply.
- Hurricane, Named-Storm or Windstorm Deductibles can be either a dollar amount or a percentage of the coverage amount and can be increased to reduce your premium. However, you need to consider carefully how much out-of-pocket expense you are willing to retain. For example, if you have a 2% Hurricane Deductible and your house is insured for $200,000, your out-of-pocket expense would be $4,000 (2% of $200,000) for any property damage caused by a hurricane.
- Some additional coverages, like earthquake coverage, have a separate set deductible.
- Deductibles are an important feature of the policy and should be discussed thoroughly with your agent to understand what each choice you make can mean in terms of your out‐of‐pocket expenses.
Primary Homeowners Insurance Coverages
Dwelling Coverage (Coverage A*)
Dwelling coverage is the section of the policy that pays for damage to your home in the event of a covered loss. The amount you purchase should be enough to completely rebuild your home and attached structures (like an attached garage) in the event of a total loss – but should not include the value of the land. Note: Market Value or Assessed Value of your property should not to be used to determine the cost to rebuild. These values are not good indicators of local building costs. Talk to your Bankers agent about how best to determine the cost to rebuild.
Other Structures (Coverage B*)
Many properties have separate buildings such as sheds or fences. Other Structures coverage reimburses the costs associated with repair or replacement in the event of a covered loss.
Personal Property (Coverage C*)
As a homeowner, you acquire a lot of items to decorate and use in your home. Personal Property coverage provides protection for some of those items. This coverage is included in a Homeowners policy at Actual Cash Value (ACV), which is the value of the item at the time of the loss, minus any accumulated depreciation. This coverage can be upgraded to Replacement Cost (RC) for an additional premium. This will allow the property to be replaced with like‐kind property at today’s market price subject to property insurance policy limits and deductibles. This is what most people prefer and we highly recommend that you purchase Full Replacement Cost coverage as part of your policy.
Loss of Use (Coverage D*)
Loss of Use coverage reimburses you for additional living costs incurred if you are unable to live in your home due to a covered loss.
Personal Liability (Coverage E*)
This coverage pays for legal damages that are awarded to a third party when you are found to be liable for their bodily injuries or damage to their possessions while they are on your property. This coverage also helps pay your attorney fees and court costs related to a covered loss.
Medical Payments (Coverage F*)
Medical Payments coverage helps pay for medical bills incurred by visitors to your home who sustain bodily injury while on your premises or due to your personal activities.
* As labeled on your policy
Additional Homeowners Insurance Coverages
Described below are additional coverages you may add to customize your homeowners insurance policy to fit your individual needs. Not all coverages are available in all states. Please consult with your local agent for availability.
In some states, your policy does not include coverage for any bodily injury or property damage from animals. The Animal Liability coverage may be added to the policy to extend coverage to losses arising from pets you own or keep. Breed limitations apply. The coverage provides Personal Liability coverage up to $300,000. Coverage Limits vary by state.
This coverage may be added to provide up to $15,000 coverage for expenses incurred as a direct result of any one identity theft discovered by you on or after the effective date of the endorsement during the policy period.
Personal Information Services and Senior Care Resources
We offer Personal Information Management Services to help keep your personal information safe, address suspected fraud, and defend against identity theft-related problems. Our Senior Care Resource Caregiver Program addresses the challenges of elder caregiving, including unlimited access to an eldercare advocate, a web platform to eldercare information and a searchable database of recommended providers. Please contact Bankers Insurance Group customer service at 1-800-627-0000, extension 4703, to be connected with your personal fraud specialist or senior care advocate.
Other Members of Household
This coverage will extend liability to include someone who lives with you and is not related to you.
Additional Replacement Cost (Building)
Sometimes significant increases in materials and labor demand increase the cost of rebuilding when a catastrophic loss impacts a lot of properties in an area. This endorsement provides for additional coverage with a limit of 25% of the Dwelling ‐ Coverage A. The additional amount cannot be applied to any other coverage.
The policy may be endorsed to provide coverage for necessary expense to replace lock cylinders due to stolen keys or covered theft of property from within your home.
Full Replacement Cost
Full Replacement Cost is often preferred to Actual Cash Value. Here’s why. Actual Cash Value is the value of the item at the time of the loss, after depreciation, using materials of like kind and quality to the extent practical. So, if you lost a 10‐year‐old TV, it’s likely that Actual Cash Value will not give you enough money to purchase a new one. Often, you’ll only receive a small fraction of what it would cost to replace the item.
It’s important to note that your basic Homeowners policy provides coverage for personal property only at Actual Cash Value.
Full Replacement Cost coverage may cost a little more, but it provides your best chance to replace what you’ve lost. Replacement Cost is what it will actually cost you to purchase new items to replace those lost items. As you can see, this is a very important consideration when purchasing insurance.
This coverage provides financial protection against direct loss caused by water that backs up through sewers or drains or for water that overflows from a sump or related equipment. You can select from various amounts of protection.
Golf Cart Physical Damage & Liability
Physical damage to the golf cart will be paid on an actual cash value up to $5,000. You can choose your liability limit separate from the personal liability limit on your policy but you can’t exceed your policy limit.
Scheduled Personal Property
This additional coverage may be added to the policy for specifically scheduled (itemized) personal property. Some of the items you can cover include bicycles, cameras and projection equipment, fine arts and antiques, furs, golf equipment, guns, musical instruments, other sports equipment, personal jewelry, stamps and coins, and silverware. The rates for this coverage are based on the value of the items you are covering.
Your basic policy excludes coverage for loss resulting from an earthquake, but you can add this coverage. The limits are the same as provided by your policy for other risks.
Increasing Your Coverage Limits
Some policy limits can be increased to better suit your individual needs. These increased individual limits for the items listed below will still fall within your total coverage amount, but the amount you receive per item can be increased with this coverage.
- Home Computer
- Jewelry & Furs
- Increased Business Property
- Loss Assessment Coverage
- Increased Ordinance or Law
You may be eligible for insurance discounts based on your personal characteristics, as well as features of your home that will reduce your premium.
Living in a CAT State
You Want Catastrophe Experience When You Need It
Those of us who live in a “CAT State” –
a catastrophe-prone state – know that being prepared is key. This includes having the right insurance coverage. That said, one of the most important considerations in selecting an home insurance company – especially if you live in coastal states – is catastrophe experience. Bankers has weathered an impressive 25+ catastrophes and offers exceptional customer service and claims response time. You don’t want to think it can happen to you, but, in the event of an emergency, you want an home insurance company that knows precisely how to meet your needs.
Remember, you can buy Earthquake and Flood Insurance separately. These two important risks are not covered in your basic homeowners policy.