Category Archives: Massachusetts Homeowners Insurance Company

What Exactly Does Your Homeowners Insurance Policy Cover? Part 2 of 2

Tip #2: Check The Value Of Your Policy Against The Local Building Costs On A Yearly Basis

It is always a good idea to check with your insurance agent to see if they offer an Inflation Guard Clause. In essence, it automatically adjusts the dwelling limit when you renew your policy to reflect the current construction costs in your area. That being stated, it is a good idea to keep up with the local building costs by checking with the builders association.

Tip #3: Avoid Insuring Your Home Based On Market Value

Do not insure your property based on the current market value because the cost to rebuild your home may actually be higher or lower than the price you paid for it or the amount you can sell it for in the current real estate market.

There are also two (2) methods to insure your personal belongings. They are as follows….

Replacement Cost Coverage

In essence, replacement cost coverage is a part of the insurance policy that pays you the dollar amount needed to replace damaged personal property with items of like quality or kind, and without a deduction for depreciation.

Actual Cash Value

In essence, actual cash value is a part of the insurance policy under which the policyholder receives an amount of money equal to the replacement value of the damaged or missing property minus depreciation. The coverage is for actual cash value unless your homeowner’s policy specifically states that the personal property is to be covered for its actual replacement value.

When it comes to insuring your personal items, there are a few tips that you should keep in mind. They are as follows….

Tip #1: Review The Limits Of Your Policy For Personal Items

It is important to check the limits of your homeowner’s insurance policy regarding your personal items such as jewelry, silverware, computer equipment, and expensive collectibles. If the limits happen to be too low, you should consider purchasing additional personal property insurance coverage in the form of a floater. It is also referred to as an endorsement, which means it is in addition to your standard homeowners insurance policy. A floater is a form of insurance that provides you with the ability to insure valuable items in a separate manner.

Tip #2: Take An Inventory Of Your Personal Items

It is also important to take on inventory of everything that you own in your home, along with items that you own that are located in other buildings on the property such as an unattached garage or storage shed. The key is to actually take the time to list the major items that you own. You should include all available information when writing it down such as the serial number, make and model, purchase price, date of purchase, and current market value.

Tip #3: Document Your Belongings

A great deal of homeowners do not take the time to actually document their belongings. It is always a good idea to take either still pictures or videos of the items. You should also attach receipts to your items when applicable. Keep in mind that you should store the records pertaining to your belongings away from your home. For example, if your house were to burn down then the records of your belongings will burn if stored at the property. You can always rent a safe deposit box at your local bank. You should also update the inventory list and records when you make any new purchases of value.

In conclusion, perhaps the most important thing that you can do in order to safeguard both your home and property inside of your home is to fully understand that your homeowner’s insurance policy is actually a contract. That means you need to be fully aware of exactly what is in that contract.

It is important to fully understand exactly what you are purchasing when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs now and in the future.

What Exactly Does Your Homeowners Insurance Policy Cover? Part 1 of 2

Homeowners insurance is certainly not something that most of us want to think about, let alone discuss, until we actually need it. However, understanding what is covered and what is not covered in your policy can actually make the difference of being able to rebuild your property and replace your personal belongings if a disaster happens to strike. That being stated, it is a good idea for homeowners to do an annual insurance policy check up in order to ensure that they are keeping up with local home remodeling costs, along with inventories of their personal items.

In most cases, your homeowner’s insurance policy covers damage that was caused by fire, windstorms, hailstorms, explosions, and water damage that excludes flooding. Other losses are typically covered such as the cost of living somewhere else while your home is being repaired or rebuilt, and theft of your belongings. Most policies also cover legal liabilities if other people are injured while visiting your home. The bottom line is that your homeowner’s insurance policy covers both the structure of your home, and your personal belongings that are located within your home. There are actually three (3) methods to insure the structure of your home. They are as follows….

Replacement Cost

In essence, replacement cost pays the policyholder the amount of money that it costs to replace the damage to the property. This occurs without a deduction or depreciation, however it is limited to a maximum amount based on the specific policy.

Extended Replacement Cost

In essence, extended replacement cost is just what it sounds like, an extended replacement cost policy that covers costs up to a particular percentage over the limit. Typically it is based on 20%. Extended replacement cost provides you with protection against occurrences such as an unexpected increase in construction costs.

Actual Cash Value

In essence, actual cash value covers the costs to replace aspects of your home minus a determined amount of depreciation costs based on both age and use. For example, if your 15-year-old roof is destroyed due to a fire, and the life expectancy of that roof is 20 years, the cost to replace it is significantly higher that the tangible cash value of the roof.

It is important to insure your home for the total amount that it would cost to rebuild it if completely destroyed. Keep in mind that number is not the actual market value, rather the cost to rebuild. Also keep in mind that if you fail to have adequate insurance, the amount may not actually cover the full costs of repairing or replacing the damaged items. The following tips will help to ensure that you have enough homeowner’s insurance coverage….

Tip #1: How To Estimate The Amount Needed To Rebuild Your Home

In order to estimate the amount needed to rebuild your home, multiply the local building costs by the total square footage of your home. Consult with your local builders association in order to figure out the building rates within your area. Please note that this is only an estimate that will provide you with a ballpark figure. Always consult with your insurance agent prior to making any changes to your policy.

To Be Continued….

It is important to fully understand exactly what you are purchasing when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs now and in the future.