What exactly does homeowners insurance cover? Bart DeLio is here to go over what you need to know about your policy.
I’m joined today by Bart DeLio of Farmers Insurance to talk a little bit about what to look for in a homeowners insurance policy and what these policies generally cover. In many cases, your home is the most expensive thing you’ll ever own, so it’s worth it to make sure that you’re covered.
What does your homeowner's insurance actually cover? Bart says that at its most basic, homeowners insurance covers the building itself. For this reason, you’ll want to make sure that your insurance company is using a replacement cost program with a rough idea of what the replacement cost would be for your home.
Bart cautions that in California, the land is usually worth more than the buildings themselves, so sometimes homeowners may find themselves paying upwards of $1 million for their property, only to find out that the house itself is worth less than $400,000 to replace.
Valuables like guns, jewelry, and collectibles should be covered separately.
Homeowners insurance also covers personal property, which is typically 55% to 75% of what is on the home-building section of your policy. There are certain limits that come with this, however. Bart defines “personal property” as essentially anything that falls out of the home if you were to turn it upside down, which may include clothes, silverware, and furniture. Valuables like guns, jewelry, and collectibles should be covered separately. Theft, fire damage, and water damage are some of the most common occurrences that are covered as well.
Something else that homeowners insurance policies cover is loss of use. What this means is that if you are not able to use your house due to a covered claim, like fire or water damage, your insurance will pay for you to stay somewhere else. This is an invaluable part of homeowners insurance coverage because even minor claims could cause you to have to leave your house for months at a time which could potentially cost you thousands of dollars.
Liability is also included in a homeowner’s insurance policy, which will cover bodily injury and property damage to other parties anywhere in the world. Bart explains that if you were to run somebody’s foot over with a shopping cart, for example, your homeowner's insurance would cover it.
Bart advises reviewing your homeowner's insurance policy with your agent, especially if you decide to make any improvements or renovations to it that could change its value.
If you have any other questions about homeowners insurance and what it covers, give Bart a call at 562-433-0300 or send him an email at [email protected]. If you have any other questions about buying or selling a home in our market, don’t hesitate to reach out to me as well. I’d be happy to help you!
