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In Touch With 21st - February 2014

Am I covered? Homeowners questions answered.


Am I covered?

If a flood, earthquake or other natural disaster were to damage or destroy your home, would your insurance coverage be enough to rebuild your house? Understanding the type coverage you have (or need) will help you with your decision on what coverage is right for you. Many assume they are covered in a given situation, but unfortunately, may not be. Note that these examples are based on a Homeowners-3 (HO-3) policy, the most common homeowners policy in the United States.

Q: How do I know how much insurance I need?

A: Numerous factors go into how much homeowners insurance you need. The type and amount of coverage you need depends upon:

• The type and value of your home

• The value of your personal property (the contents)

• Whether you have a mortgage on your property

• Your financial situation

If you decide to remodel or increase the value of your home in some way, the necessary amount of coverage for you could change. Be sure to evaluate your coverage needs regularly.

Q: What if someone slips or injures themselves on my property and decides to sue me. Will my homeowners policy cover this?

A: It should. Personal liability coverage is a standard part of most home insurance policies. This coverage will pay for damages caused by a fall or other accident on your property. It will also pay for the legal costs of defending you against a claim. The medical payments part of your homeowners policy will cover medical expenses. The standard amount of coverage is $100,000. Higher limits are available if you need additional coverage.

Q: Does my homeowners policy cover flood damage?

A: No. Flood insurance is provided by the federal government, under a program run by the Federal Emergency & Mitigation Administration (FEMA). In some parts of the country, homes can be damaged or destroyed by mudslides, which are also covered under flood policies. If you live in an area prone to flooding or mudslides, it is a smart decision to purchase flood insurance. Additional information concerning flood zones is available here from FEMA.

Q: Does my homeowners insurance cover damages caused by an earthquake?

A: No. Earthquake coverage is sold as a separate or additional coverage to a homeowners policy. The cost of this coverage can vary from one area to another, depending on the likelihood of a major earthquake occurring in a given area.

Q: Will I be covered if a tree branch falls on my home during a storm and causes damage?

A: You should be. You are covered for the damage to your roof. You are also covered for the removal of the tree, usually up to a $500 limit. It’s a good idea to remove any dead/dying trees close to your house and prune branches back as well.

Q: Am I covered if a pipe bursts and causes water damage to my house?

A: You should be. The typical homeowners policy covers you for accidental discharge of water from a plumbing system. To lessen the likelihood that a pipe will burst, have your plumbing and heating systems inspected once a year.

How much do you know about your coverage?

Knowing exactly what your policy covers and excludes will help you determine whether you need to purchase additional coverage as it relates to your situation. If you are looking for coverage on your home, there are many benefits and discounts available for 21st Century auto insurance policyholders that purchase a homeowners policy through 21st. Click here to see how much you could save.

Please note: This information is of a general nature for educational purposes only. It must not be taken as advice and does not signify an endorsement or recommendation of a type of coverage. All coverages are determined by the policy contract.

Sources: Insurance Information Institute (iii.org); MSN Money; insurance.com

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