Home Insurance With Real Personal Service
Understanding Home insurance
Home insurance can be complicated and frustrating, but it does not need to be! As insurance agents, we encounter every good and bad situation you can imagine. The process of finding the right agent, company, type of coverage, or coverage amounts is often overwhelming. On top of that, we tend to only think about insurance when we have a major life change or a claim. The process can seem almost mysterious, but when it is broken down into understandable parts it is easy to comprehend.
Insurance is based on the law of large numbers. Simply put, with more people in the same pool, a catastrophic loss can be spread out over a large group rather than the unfortunate few claimants. Broken up, there are two major factors that play into the cost of insurance:
- The number of people paying premiums in a pool of insurance.
- How diversified the risk of losses is within the pool of people.
Insurance companies want to build their book of clients, but they want to diversify areas and types of risks they insure. In layman’s terms, the insurance company does not want all their clients to be in the same area or to insure all the same things. Therefore, your rate may be better than your neighbor who has the same house, in the same area, but purchased at separate times or with a different company.
Home Insurance: What is it?
For many of us, our home is our castle filled with personal and priceless belongings. Along with those belongings are memories, and sometimes valuable family heirlooms. Potentially one of the biggest investments of our lifetime – our home needs protection! Imagine trying to replace every single item in your home. It is hard to comprehend since many of us are not faced with such catastrophic loss. However, if you were, home insurance is designed to help you recover financially.
Simply put, home insurance is financial coverage for damage to a personal residence. It protects your home in case of an unexpected damaging event, theft, or disaster, so that you can repair or rebuild it. Home insurance coverage includes interior and exterior features, and covers liability claims in case of harm done to others by you or a family member. It can also cover living expenses while your home is being repaired if you are displaced. Additionally, most mortgage companies require home insurance to obtain a mortgage.
What Does it Cover?
There are various levels of coverage against what the insurance industry refers to as “perils” (damaging and costly events). Policy coverages vary based on the extent of coverage paid for by the homeowner. Some examples of standard perils covered by basic insurance include:
- Fire or lightning
- Windstorm or hail
- Riot or civil commotion
- Damage caused by aircraft
- Damage caused by vehicles
- Vandalism or malicious mischief
- Volcanic eruption
What Doesn’t Home Insurance Cover?
You might be surprised to learn that certain perils are not covered by home insurance and need to be bought separately such as:
- Maintenance damage
- Sewer backups
Do I Need Hurricane Insurance?
“Hurricane insurance,” is usually referred to as the “wind” portion of your policy. If you have a loan on your home, you are mandated to have it under the terms of your loan. If you own the home outright, then you can choose whether to have it! 100 times out of 100, DLR Insurance Group will tell you it is a good thing to have, even in the event you do not want it!
Is it Illegal Not to Have Home Insurance?
No. But, it is not advisable!
According to the Insurance Information Institute, you are legally able to own a home without home insurance. For example, if you are not reliant on a mortgage company, and your home is paid off, you do not legally have to carry home insurance. At the same time, homes tend to be among our largest investments, and therefore it is only wise to protect it against damage, catastrophic events, or loss. Importantly, almost all mortgage companies require proof of home insurance to obtain a loan or to refinance.
Familiarize Yourself with These Key Terms:
- Replacement Cost: the cost a homeowner would pay to repair or replace their damaged or destroyed home with that of similar quality. Think of this as replacement value.
- Actual Cash Value (ACV): The amount to replace or repair a dwelling minus depreciation. Think of this as fair market value.
- Stated Value: This is the value “stated” at the start of your insurance policy.
At DLR we pride ourselves on providing top customer service to all our clients. Contact us directly at (941) 361-1532 so that we can walk you through your unique needs and make sure your home insurance is working for you.