Homeowners and Renters Insurance

Get the Facts

If you own a home, you’ll want to have insurance on it. If you have a mortgage, your lender will require it.  You’ll need a homeowners policy, which covers against three types of losses:

• Loss/damage to the house itself
• Loss of your personal belongings (contents)
• Your liability for other people getting injured on your property

What covers loss/damage to the house itself?

This is the main purpose of homeowners insurance. If your house burns down or is damaged, the insurance should kick in to help cover your financial loss. This is called dwelling coverage.

What covers the loss and damage to my stuff?

Contents coverage covers all your stuff, either in your house or when you are out and about. It’s wise to make a detailed home inventory and set your limit based on what it would cost to replace the things of value.

What about liability for injury and accidents?

Personal Liability Protection helps cover your legal liability if your negligence causes someone else’s injuries or property damage. This can pay for the victim’s medical bills as well as your own legal defense. If your dog bites the mail carrier, or if someone was injured during an accident in or around your home, this portion of the policy will kick in, but only up to a point. This coverage protects you when you are considered legally liable for an injury or damage.

I’ve heard crazy stories…is the liability coverage enough?

A typical policy limits personal liability coverage to $100,000 and medical payments to others to $1,000 per person. You can see that the coverage, though comfort­ing, isn’t very much. So there’s another product, called umbrella liability coverage, which can increase that amount dramatically (to $1 million or more). This is usually an inexpensive add-on to your policy. If you have an expensive home or considerable assets, this is usually some very inexpensive protection against these unknowns.

I rent an apartment. How do I protect my stuff?

Renters insurance is the contents insurance for those who rent instead of own. It protects your furniture, electronics, computers, jewelry , sports equipment, etc. if they are stolen or damaged by fire, water or other catastrophes that can happen in your home. Renters insurance also provides liability cover­age in case someone is hurt in your rented home and decides to sue you instead of the homeowner.

Is Renter’s Insurance worth the cost?

Think carefully about your need for renter’s insurance before buying. If you’re holding off on getting great furniture later, the money may be better off invested than put into insurance. Remember, we’re worried about insuring against life-changing losses, not the small stuff.

Savings tips:

Surprisingly, costs for the same coverage can vary dramatically. Be sure to shop around every year. Just a couple calls or emails could yield you hundreds of dollars in savings.

But be sure to compare apples to apples. Ask for quotes with the same coverage in the same categories.

Also, compare the credit worthiness of the insurance company by seeking out their ratings (AM Best, for example, rates insurance companies). A quick Google search of the company name can tell you what you need to know. And don’t necessarily be afraid of companies you’ve never heard of.  There are many solid insurance companies out there that we never hear of because they don’t spend to advertise with sports teams.