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Home Insurance

There are few, if any, material possessions that are as important to people as their homes. After all in addition to being the place where they spend a huge portion of their lives, one’s home also has a ton of different memories attached to it. Plus from a purely financial, practical point of view, one’s home is likely to contain nearly all their worldly possessions and itself be the single most expensive thing someone owns. The loss of, or damage to, a home can be utterly devastating. That is why it is so essential to be well-protected with a comprehensive homeowners policy.

A homeowners policy is actually a package policy. That means that it will have several different, distinct parts that are designed to protect against various specific types of losses, damages, and liabilities. Individual policies will vary of course, but for the most part there are a few different types of coverages that you can expect in nearly all types of homeowners policies. Let’s take a look.

Structural Damages

In many ways this is the most fundamental aspect of homeowners insurance. It covers the actual, physical structure of the house itself from damage due to covered disasters. A few of the most commonly covered disasters include:

  • Fire
  • Hurricane
  • Hail
  • Lightning

Typically floods and earthquakes are not covered and would require a separate, special type of insurance. In addition to those exclusions routine wear and tear that naturally occurs over time on the structure is not covered.

In addition to the house itself, other detached structures are usually covered at a level of about 10% of the main house’s coverage. These additional structures can include things like a garage, shed, or gazebo.

Personal Belongings

As we mentioned above, one’s personal belongings are also a major concern that people will definitely want to provide coverage for. A homeowners policy typically covers the personal belongings inside the house for about 50% – 70% of the coverage amount for the structure of the house itself. That means that if you have $100,000 worth of coverage on the physical house itself, you will typically have about $50,000 – $70,000 worth of coverage on your personal belongings.

In most cases, depending on your specific policy, these belongings are also covered off-premises. That means that they will be protected even if you travel with them. Expensive items like jewelry for example are usually covered, but there may be a specific limit on them and if additional coverage is needed it can usually be purchased separately.

Many people also take pride in their landscaping such as trees, shrubs, or other plants. These items are also typically covered under the homeowners policy, usually at a rate of about 5% of the structure’s coverage, or up to about $500 per item.

Liability Protection

This type of coverage is designed to protect you against financial loss that you might incur as a result of you, your family members, or your pets causing bodily or property damage to someone else. The key distinguishing thing here is that it covers the other people and their possessions, not you and your possessions. That means for instance if you child or pet damages someone else’s property then that person will be reimbursed by the policy, but if your own property is damaged through their actions then that would not be covered.You are actually covered not just on your own property but anywhere you go.

This type of coverage is designed to protect you against costly lawsuits and legal claims. It even includes no fault medical coverage, generally up to about $1,000-$5,000. This is designed to kick in and cover someone’s medical bills if they are hurt on your property without exposing you to a costly lawsuit or liability claim. This will not cover your medical bills or those of your family or pet.

Liability coverage generally starts at around $100,000, but many experts recommend getting at least $300,000 or more in coverage for full protection. If you would prefer even higher coverage you can also consider adding an umbrella policy.

Additional Living Expenses

This part of the policy provides coverage for hotel costs, restaurant bills, and other expenses that are incurred as a result of having to live away from home due to the covered disaster. Thus if it is necessary to vacate your home while it is being repaired or rebuilt due to a fire, storm, or other covered incident, then this part of your policy would kick in.

Specific coverage varies but often provides coverage up to about 20% of the amount your house was insured for. Additional coverage can usually be purchased for an extra premium. Other types of policies may provide unlimited coverage for these expenses, but only for a limited amount of time.

In addition to the coverage discussed above, this part of the policy would also cover you for loss of rent if you have a tenant whom you would have been collecting from had the covered incident not occurred.

Umbrella Policies

The aforementioned types of coverages generally make up the main part of most homeowners insurances. However, in addition to these many people benefit from adding an umbrella policy. Umbrella policies are designed to fill in the gaps of regular coverage and provide even higher limits of coverage. Thus if your liability coverage is not enough to pay the full claim of a lawsuit the umbrella policy would go into effect.

For more information about these types of coverages or for rate quotes please contact us. We are always happy to discuss any concerns or questions you may have and to advise you accordingly.