Home Insurance 101

by California Casualty | Homeowners Insurance Info | 2 comments

You’ve bought your dream home and it’s time to get it insured. You want to choose the right coverage to fully protect your investment. While you have a basic idea of what home insurance probably covers, you may not know the particulars. 

A homeowner’s policy is actually a “package” of coverages. It protects your home from specific events that can damage your property, and provides additional living expenses if you are unable to live there due to an insured loss. It also protects your personal belongings. In addition, your homeowner’s policy covers you for lawsuits or liability claims that might otherwise be your responsibility if you accidentally injure other people or damage their property. Here’s the breakdown from A to Z (or in this case, F).

Coverage A: Dwelling

Dwelling coverage refers to the structure of your home. This includes the roof, walls, floorboards, cabinets, and bath fixtures. The easiest way to think about it is that if you could tip your house upside down, the dwelling is everything that remains attached.

What is covered: This insurance covers open perils. That means a loss is covered unless it’s excluded by your policy. Coverage A generally covers direct physical loss due to fire/smoke, lightning, windstorms and hail, explosions, vandalism and theft. If one of these perils destroys your home, your insurance provider will pay to rebuild it up to your policy limits. 

What is not covered: If it is listed as an exclusion, it is not covered. Typically, natural disasters such as flooding and earthquakes are not covered by dwelling coverage. You can add these coverages with a separate policy or an endorsement added to your property policy.  

Coverage B: Other Structures

If your pool is in the ground or installed permanently above the ground on your property, it is covered under Coverage B – Other Structures. This is an insurance term describing a detached structure on your property. Other structures include pools, fences, gazebos, sheds, etc. However, if your pool is above-ground but portable, it is considered part of your personal property and covered by Coverage C – Personal Property insurance. 

What is covered: This insurance covers open perils. That means a loss is covered unless it’s excluded. 

What is not covered: Typical exclusions include flood, earthquake, or wear and tear.  For other structures, the coverage limit is generally set at 10% of your home’s coverage limit. That means if your home is insured for $200,000, the coverage limit for your detached garage would be $20,000. For an additional premium, you can add an endorsement to increase your coverage.

Coverage C: Personal Property

Personal property coverage protects your possessions, such as furniture, clothes, sports equipment, and other personal items. Again, if you could tip your home upside down, everything that would fall out is considered personal property. This coverage protects these items whether they are in your house or off-premises.

What is covered: If your possessions are stolen, or damaged by fire/smoke or any of 16 covered “perils,” your policy will pay for them subject to your deductible. For personal property coverage on a homeowner’s policy, you typically get 50 or 75% of Coverage A, the total amount of coverage for your home. You may choose replacement cost or the actual cash value (ACV) for reimbursement. ACV is the amount the item is worth, minus depreciation for its age. It will cost a little more for a policy that provides replacement cost. 

What is not covered: There are dollar limits for certain items, such as jewelry, firearms, animals, cars, planes. See your policy for a full list. You may choose to purchase additional coverage to ensure your valuables are fully insured. 

Coverage D: Loss of Use

If your home is damaged in a covered loss, it may not be livable. If that’s the case, you would need to stay somewhere else. Loss of Use, also called Additional Living Expense, covers you for any necessary increase in living expenses, such as lodging, food, and gas.

What is covered: Your policy will provide a flat percentage toward living costs, usually 30% of the Coverage A amount. 

What is not covered: Some states have time limits on when you can use this coverage. Payment will be for the shortest time required to repair or replace the damage, or if you permanently relocated, the shortest time required for your household to settle elsewhere.

Coverage E: Personal Liability

Personal Liability protects you if a claim is made or a suit brought against you for bodily injury or property damage caused by an occurrence to which coverage applies. Liability covers you at your place or anywhere in the world. 

What is covered: If you are found liable, the policy will pay up to its limit of liability for damages for which an insured is legally liable. This can include medical expenses, lost wages, pain and suffering, and permanent scarring. The policy also provides a defense in court, if needed, for the policyholder. This is at the insurance company’s own expense.  

What is not covered: You are only covered up to your policy’s limit. Coverage starts at $100,000 but should be increased to a minimum of $300,000.  You want to consider how much the home and all of your assets are worth and select an amount up to $1,000,000. If you have a pool, hot tub, trampoline or other attractive nuisance which is likely to attract children, consider adding an umbrella policy for additional coverage.

Coverage F: Medical Payments & Other

If you are not liable, but your guest was injured through his/her own fault, then Coverage F – Medical Payment to Others may cover your guest’s medical bills. 

What is covered: Under Coverage F, the insurance company will pay the necessary medical expenses to a person injured on the insured location with the permission of an insured, or off the insured location if the injury is caused by the activities of an insured or caused by an animal owned by an insured.

What is not covered: You and your family are not covered. This is only for guests, and they are only covered up to the limit of your policy.

A Word About Deductibles

Generally, the higher your deductible, the lower the cost of your insurance premium. Since the deductible is the amount your insurance provider will subtract from an insurance payout, you’ll want to select a deductible that you’re comfortable paying out-of-pocket after a loss.  

Common Home Endorsements

You may add specific endorsements to your homeowner’s package of policies for additional coverage. Here are some of the most popular ones.

Scheduled personal property (SPP) Coverage is for items that have higher values above your personal property coverage limits. This includes heirlooms, watches, jewelry, instruments, and furs. SPP offers much broader coverage for your precious items – if you misplace a set of earrings, they are covered; if a diamond falls out of a ring, or a guitar breaks, they’re covered. There is no deductible if the covered items are stolen, lost, or damaged. Insurance pays the lowest of the four options: repair, replace, actual cash value or the amount of insurance.

A Water Back Up and Sump Discharge or Overflow Endorsement covers two potential losses: (1) if the sewer backs up into your home via the sewers or drains or (2) if your sump pump overflows or discharges. The amount of coverage and the deductible vary by states. The endorsement comes with a maximum amount of coverage ($5,000 or $10,000) and its own deductible ($250, $500 or $1,000).  

Home Day Care Coverage: This extends your liability coverage to those in your care. Most states require you to have it for licensing, and parents also may request to see proof of this coverage.

Refrigerated Property Coverage: When there is a power outage, the food in your refrigerator could spoil. A standard homeowner’s policy may cover the costs of replacing some of the food. A refrigerated property policy provides additional coverage. A refrigerated property policy adds up to $500 of coverage for property, such as meat that spoils because of a power outage or equipment failure.

Special Computer Coverage: With everyone working remotely, computers have become our lifeline. Consider a special computer coverage option to ensure you are covered for your devices: desktop computers, laptops, tablets and smart phones. With this coverage, you will receive more money for your devices if they are damaged than with traditional homeowner’s.

Permitted Incidental Occupancies: If you have a home-based business, this endorsement increases the coverage for your business property. This includes furniture, equipment, and supplies.

Ordinance or law coverage helps you bring your home up to current building codes for repairs and/or rebuilding.

Identity fraud coverage covers the expenses associated with identity theft.

Remember that you can ask for ways to lower your home insurance costs when you purchase a policy. You may be eligible for group discounts. There are discounts if you have a burglar/fire alarm. There also is a cost savings and convenience of paying in full with most policies. 

This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.

Common Causes of a Flooded Basement

by California Casualty | Homeowners Insurance Info | 0 comments

Imagine walking downstairs and seeing your basement filled with water and your precious possessions floating around… It’s not something anyone wants to ever experience, but unfortunately, it’s something that many Americans deal with each rainy season.

A flooded basement can cost you thousands (maybe more), and it’s not just in lost belongings. Flooding can cause damage to your walls and floor and also lead to mold, mildew, and other health hazards.

Sometimes flooding is a one-time occurrence. Oftentimes, it is more frequent. Knowing the triggers of flooding can help you take steps to keep your basement dry and your possessions safe. Here are the common causes of a flooded basement. Pro Tip – You can help protect against many of them with flood insurance.

1. Location

Your location is one of the key reasons that your home floods. You may live in a low-lying area prone to flash floods. Your home may sit at the bottom of a hill, drawing precipitation toward it. If the land around your home is sloped down toward it, there could be a risk of your basement flooding. Take a critical look at your property. Look for depressions or standing water around your home, in the ground, or with pavement that has settled or deteriorated. These are areas that you will want to address.

What you can do: Fill the depressions in the ground with a mound of soil to create a slope away from your home. Use clay-based rather than sandy soil, as it will help to repel the water. Remove and/or replace pavement, and again, slope it away from your home. If a hill next to your house is causing the problem, a civil engineer may be able to provide some guidance.

2. Weatherproofing

During construction, your home’s foundation, and your basement’s walls and floor, should have received a coating of sealant to keep water out. However, sealants can deteriorate over time, allowing surface water to leak in. Surface water also can pool around your home due to the location and settings of your lawn irrigation system. Both of these issues are relatively simple to fix.

What you can do: Avoid placing irrigation next to the house, or limit water dispersed there. Make sure your irrigation system does not turn on when there has been plenty of rain. You also can take steps to reseal your basement. Use a polyurethane caulk designed for masonry to seal any cracks or gaps that are larger than 1/8 inch wide. (For finished basements, consult your local hardware store for options.) Then apply a waterproof coating to your basement’s walls and floor. You also can use waterproof paint.

3. Groundwater

If surface water is not the issue, groundwater might be. Underground pressure can push the water into your basement through cracks or holes. If you notice water coming up through the concrete floor, or coming in from multiple points, this could indicate groundwater.

What you can do: A perimeter drain system can help. Such systems relieve the pressure and use gravity to pull the water to the sides and down. They can be installed above or below the slab. An under-floor system may be better but it is more expensive. It requires some of the concrete floor to be removed in order to install the drainage pipes. If you already have a drainage system, such as drain tile or weeping tile, and you are still seeing water or moisture, it’s possible that you need to replace it. Those systems may degrade over time.

4. Clogged Gutters and Downspouts

It’s not unusual for gutters to be clogged with leaves and other debris. This prevents them from effectively doing their job, which is draining the water into a downspout and away from your home. Improperly positioned or broken downspouts also contribute to the problem. Water that drains too close to your house not only can create flooding; it can erode soil which can lead to further problems.

What you can do: Clean your gutters a few times a year. Install a gutter guard to reduce future clogs. Make sure your downspout drains far enough from the wall, at least 5-6 feet. Some experts suggest as much as 10 feet.

5. Plumbing Leaks

If you notice a large amount of water quickly, it could be a plumbing leak. Broken, cracked, and clogged pipes can cause this type of emergency. During winter months, water freezes and expands, sometimes bursting pipes. All of these issues can cause your basement to flood.

What you can do: Most likely, your pipes have to be replaced. Call your plumber to repair the issue as soon as possible.

6. Sump Pump Failure

You may have a sump pump installed, a device that collects excess water and drains it outside your home. A sump pump is powered by electricity, and therefore only works when there is power. Consider buying a sump pump with backup battery power to avoid any interruptions. If your sump pump fails because of lack of power, or because it is not working properly, that could cause your basement to flood.

What you can do: Regular inspection, cleaning, and testing your sump pump can help. Consider an add-on to your homeowner’s insurance of sump pump discharge or overflow coverage. This can help cover the costs of repair and replacement in the event of a sump pump failure.

7. Sewer Backup

Heavy rain can sometimes back up the municipal sewer system. Sewer backups also may occur due to sewer lines that are clogged with waste, tree roots, or other debris. When these things happen, flooding in your basement can occur, and the results will, at minimum, be smelly.

What you can do: If your basement is flooded with sewage, get professional help to clean it. You also will likely need to get the local government involved. Finally, you can install backflow preventers to help keep the sewage out of your house.

If your basement does flood, know that an insurance policy can help cover the costs. Many people don’t realize that a traditional homeowner’s insurance does not cover floods. For that, you will need a separate policy. If you’re in a flood zone, you will want that extra insurance.

There is a 30-day waiting period to buy flood insurance, so with the rainy season upon us don’t wait until the last minute!

This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.

NEVER Do This to Your House…

by California Casualty | Homeowners Insurance Info | 0 comments

You want to take good care of your house. Not only does it provide shelter and a cozy environment for you and your family, it’s also your largest investment and you want to make sure it to holds up over time.

That’s why it’s important to avoid these unfortunately common and costly mistakes made by homeowners. Doing these things to your house could cost you big time now – or in the future, if you decide to sell.

Home Improvements

You should never…

Remove architectural features.

You may be tempted to remodel but make sure in doing so, you don’t destroy the charm of your home. That quaint tin ceiling, the chair rail molding along the wall and that detailed millwork are selling features to future buyers. Architectural details offer curb appeal and help distinguish your home.

Get rid of a bedroom or a bathtub.

Bedrooms sell homes, and similarly, so do bathtubs. Families are looking for both when buying a new house. That’s why you should never remove a bathtub in favor of a new shower. You’ll discourage families with kids and pets who need the tub. Similarly, taking down a wall to merge two bedrooms into one large one may be good for you, but it will detract from your home’s future sale price.

Cover wallpaper with water-based paint.

Water-based paint reacts with wallpaper glue, causing it to peel. So, if you paint over wallpaper with water-based paint, you’ll have a peeling mess on your hands. Instead, use oil-based primer to provide a protective barrier. Let it dry fully and then apply latex paint.

Leave cabinet doors on when you’re painting.

Painting your cabinets is an easy way to give your kitchen a facelift without spending tons of money. Just make sure that when you do, you remove the cabinet doors. That way, you won’t paint over hinges and hardware. It will turn out to be a much more professional job. Remember to keep track of which doors go in which spots. Label them with numbers under the hinge locations or back where it won’t be visible.

Do your own plumbing or electrical.

You may know a bit about plumbing or electrical. That doesn’t mean that you should add a bathroom or rewire your house. DIY projects are great when they match your experience. Hire a professional for jobs that are beyond your skill level to avoid costly mistakes.

Daily Living

You should never…

Flush flushable wipes.

They may say flushable, but they really aren’t if you want to keep water flowing through your pipes. Flushable wipes are made from synthetic materials that don’t break down. As a result, they can get stuck in your pipes or make their way to the sewer system and clog it up. The best choice always for toilets is toilet paper.

Let ceiling fans run.

You may think ceiling fans cool down your home. In reality, they move air around which helps your sweat evaporate more quickly. That’s what makes you feel cooler. It makes sense to run a ceiling fan in the room where you are; however, running it in every room when people are not present just doesn’t make sense. It just increases your energy bill.

Leave a brick in the toilet.

It used to be common for people to put a brick in their toilets to displace the amount of water used. That would ultimately save them money. But water causes bricks to crumble over time and those pieces can really damage or clog your pipes. Instead, try filling a half-gallon milk carton with sand and put it in the tank. That will save you a half-gallon of water for each flush. Or you could replace your toilet with a new model that uses less water.

Put starchy food down the disposal.

Starchy foods clump up when they come in contact with water. That’s great for cooking but terrible for garbage disposals, which can get easily clogged. Instead, put the potatoes, rice and oatmeal in the trash or compost pile.

Pour bleach or drain cleaner down the drain.

Diluted bleach is great for cleaning surfaces but not so great for pipes. That’s because this harsh chemical can damage them. Bleach also kills the good bacteria that break down waste. In that way, bleach can actually cause clogs. Drain cleaner also is hard on pipes. If you’re trying to clear a drain, use a pipe snake instead.

Outdoors

You should never…

Plant trees too close to your house.

Trees enhance our property and provide beauty and shade. But having trees too close to our homes can be dangerous. Branches can break off during storms, and in heavy winds, and limbs or trees can fall on your house. In addition, their large root systems can grow into your foundation, weakening it. Always take care to plant trees far enough away from your house: at least 30 to 50 feet away for medium and large trees and 10 feet away for smaller trees (less than 30 feet tall when full grown).

Plant invasive species.

You may love the Rose of Sharon, but if you plant it in your garden, you could find more than you bargained for. This pretty plant is an invasive species, meaning that it will easily take over your garden and your lawn. It’s tough to get rid of invasive species, so do yourself a favor. Don’t plant them in the first place and remove them as soon as possible.

Skip the last mow of the season.

Long grass provides a place for critters to hide. It also means that they will have a safe path to get into your home during the winter months. Keep your lawn short and you’ll be less likely to have these unwanted guests, plus your grass will be healthier.

Leave your hoses connected in winter.

Leaving your hoses attached can trap water which can freeze your pipes and damage them. Don’t make that mistake. Disconnect your hoses when you put away your lawnmower for the winter.

Park your car on your lawn.

It seems like common sense to park in the driveway or on the street and not on your lawn. After all, you could ruin your grass that way. But there’s another important reason. You could create a fire hazard from a hot engine on dry grass. You also may leak harmful chemicals onto your lawn. For these reasons, many local ordinances make it illegal to park on the lawn.

Luckily, home insurance covers repairs from most mistakes like these. An annual review of your homeowner’s policy will ensure you are fully covered. Talk to your insurance agent to see what’s covered under your current policy.

This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.