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As business owners, you’ve heard the term “coinsurance”, but if someone asked you to define it, you wouldn’t know how to answer. If this sounds like you, click the video link below and watch as Mike Fusco explains coinsurance, and the confusion surrounding coinsurance clauses. Mike uses the example of a building, which in many cases, is a business owner’s greatest asset.

If you have questions, or if you would like to discuss further, feel free to contact Mike using his scheduling tool below:

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When you purchase homeowners insurance, did you know that you are buying coverage not only to replace the cost of damage to your home, but also damage to personal property within your home? Homeowners insurance can also offer liability coverage to any injuries that occur at your property. Let’s explore homeowners insurance: what it covers, what it doesn’t cover, and whether it makes sense to tack an endorsement (add-on) to your policy.

What’s covered and what’s not?

No matter how well you plan, lots of things could happen to your home that are out of your control. The bright side is that many of these incidents, listed below, are generally covered on homeowner’s policy:

• Fire
• Theft
• Vandalism
• Wind
• Hail
• Smoke
• Vehicles/aircrafts

Unfortunately, not all perils are covered under homeowners insurance. Here are a few that aren’t typically covered, but the good news is you can get special insurance for some of these events if you’re in an area that’s exceptionally vulnerable.

• Flood
• Earthquake
• Power failure
• War
• Nuclear damage
• Damages from poor maintenance
• General wear and tear

What do I need to know about personal property coverage?

First, when your valuables are damaged in an event that is covered on your policy, the typical contents coverage limit (for your personal property), is set at 70% of the value of the dwelling where the contents reside.

Second, most homeowners policies pay for the replacement cost of the item as opposed to actual cash value (which deducts depreciation).

Third, there are some items you may consider to be your personal property that aren’t covered under your homeowners policy in the eyes of your insurance company. These items may include:

• Money, gold, silver
• Jewelry
• Items you use for a business purpose
• Silverware
• Firearms
• Animals
• Motor vehicles and aircrafts
• Property of tenants in a space you are renting out

If you own personal property that many others don’t, like a valuable art collection, connect with a broker to discuss adding scheduled personal property protection to your homeowners policy to protect your valuable property.

Most of us purchase homeowner’s or renter’s insurance directly from an insurance company or through an agent/broker and don’t really think twice about it as long as it meets the minimum requirements of the lender or the landlord; but there are several coverages or endorsements that are important.

Personal Property Replacement Cost Coverage

It is common for a policy be endorsed with this coverage enhancement but if not, the standard policy only pays out Actual Cash Value for your personal property or the stuff that you own. Actual Cash Value payout takes into consideration the depreciated value of the item. If you’ve ever tried to sell a used sofa or kitchen appliance you know that you generally cannot get much for it. The replacement cost endorsement ensures that the policy pays out replacement cost which is the value to replace that used refrigerator or television with a brand-new one rather than its current value.

Coverage A or Dwelling Coverage

Generally, a replacement cost calculation is completed to determine the limit of coverage needed but unless it is a high-value home and a full inspection is ordered by the insurance company, it is still just an estimate. This is where the Extended Replacement Cost endorsement comes into play. Generally available in 25% or 50% limits, this endorsement states the carrier will pay over and above the listed Dwelling coverage to rebuild your home, if necessary. This is important not only because the limit listed is just an estimate, but if there is large scale damage from a wildfire or other natural disasters, the cost of construction increases due the demand. In addition, any time there is a construction project of this size, like building a home, there is a good chance of unforeseen costs. We always include this at 150% on our policies to offer the maximum protection available.

Water Backup

Water damage claims are one of the most common types of claims homeowners face and most types of water damage claims are covered under the standard policy, such as water damage from a broken pipe or appliance. Water backing up from a sewer or drain however is not covered under the standard policy and if some coverage is not added back in via a Water Backup endorsement, your claim would be denied. Flood coverage, on the other hand, is always excluded and in most cases, will only be required by the lender if you live in a designated flood zone. In which case, a separate policy would be required.

Personal Liability Coverage

Personal liability covers you and your family from lawsuits like slip and falls, dog bites, swimming pool accidents, etc. and we always recommend taking more than the minimum $100,000. Increasing the coverage to $300,000 or $500,0000 generally only increases the policy a few dollars a year. We also recommend adding Personal Injury liability. This extends the liability to not only cover actual bodily injury and property damage claims but also mental injury, specifically because of false arrest, wrongful eviction and slander and defamation. In the world we live, with everything being permanently documented online through social media. A nasty tweet or Facebook post from your teenager could result in costly personal injury lawsuit, with this endorsement included you are protecting yourself from the defense costs as well as any potential payout.

These are just a few of the ways your homeowner’s policy can be enhanced for a relatively small increase in cost. If you are doing your own shopping it is important you are comparing apples to apples because the list of endorsements shown on the quote, or not, could drastically change the coverage you have depending on the situation. As always, contacting your local insurance professional to ensure you are getting the coverage you need and the most from your homeowner’s policy is the safest bet.

Check out more of Mike’s articles on iGrad.com!