Understanding the four essential protections provided by your homeowners policy
Homeowners coverage provides financial protection against loss due to disasters, theft, and accidents. Most standard policies include four essential types of coverage: Coverage for the structure of your home; Coverage for your personal belongings; Liability protection; Coverage for Additional Living Expenses
Coverage for the structure of your home
Your homeowner’s policy pays to repair or rebuild your home if it is damaged or destroyed by fire, hurricane, hail, lightning or other disasters listed in your policy. Most policies also cover detached structures such as a garage, tool shed or gazebo—generally for about 10 percent of the amount of insurance you have on the structure of the house.
A standard policy will not pay for damage caused by a flood, earthquake or routine wear and tear.
When purchasing coverage for the structure of your home, remember this simple guideline: Purchase enough coverage to rebuild your home.
Coverage for your personal belongings
Your furniture, clothes, sports equipment and other personal items are covered if they are stolen or destroyed by fire, hurricane or other insured disasters. The coverage is generally 50 to 70 percent of the insurance you have on the structure of the house.
Personal belongings coverage includes items stored off-premises—this means you are covered anywhere in the world. Some companies limit the amount to 10 percent of the amount of insurance you have for your possessions. You also have up to $500 of coverage for unauthorized use of your credit cards.
Expensive items like jewelry, furs, art, collectibles, and silverware are covered, but there are usually dollar limits if they are stolen. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for its officially appraised value.
Trees, plants, and shrubs are also covered under standard homeowners insurance—generally for about $500 per item. Trees and plants are not covered for disease, or if they have been poorly maintained.
Liability covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by your pets. So, if your son, daughter (or even your dog) accidentally ruin a neighbor’s expensive rug, you are covered. (However, if they destroy your rug, you’re out of luck.)
The liability portion of your policy pays for both the cost of defending you in court and any court awards—up to the limit stated in your policy documents.
Liability limits generally start at about $100,000, however, it’s a good idea to discuss whether you should purchase a higher level of protection with your insurance professional. If you have significant assets and want more coverage than is available under your homeowner’s policy, consider purchasing an umbrella or excess liability policy, which provides broader coverage and higher liability limits.
Your policy also provides no-fault medical coverage, so if a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company. This way, expenses can be paid without a liability claim being filed against you. It does not, however, pay the medical bills for your own family or your pet.
Additional living expenses (ALE)
ALE pays the additional costs of living away from home if you cannot live there due to damage from an insured disaster. It covers hotel bills, restaurant meals, and other costs, over and above your usual living expenses, incurred while your home is being rebuilt.
Keep in mind that the ALE coverage in your homeowner’s policy has limits—and some policies include a time limitation. However, these limits are separate from the amount available to rebuild or repair your home. Even if you use up your ALE your insurance company will still pay the full cost of rebuilding your home up to the policy limit.
If you rent out part of your house, ALE also covers you for the rent that you would have collected from your tenant if your home had not been destroyed.
If you have any questions or would like to review your homeowners insurance coverage. Please give us a call at 916-540-7000.
One morning this week while drinking coffee, I was scanning Facebook to see what the world was up to, while the rest of us were sleeping. As I was scrolling through today’s post, I noticed a post that said my niece’s house burnt down, and that they lost everything, including their cars. As I read the story of what happened, my heart became sad for their loss. For those of us that have not experienced a loss like this, it’s hard to imagine what that would be like, losing everything. When you suffer a loss like this, it’s overwhelming, and hard to know where or how even to begin putting your life back together.
Take a moment right now and take a look at your home, think of the all things you have collected over the years, the memories you have created. Think of the furnishings that you have bought that expresses your personality, the personality of your children. Wouldn’t that be devastating to think of experiencing such a loss? No one likes to think about losing everything, but if you were to think about it, what would I do? Being prepared is so important.
As insurance agents, we discuss coverage’s with our clients, and the importance of having the right amount of coverage in the event of a loss, rebuilding your home is just one part of the picture, how many of us could actually make a list of all our possessions and their value, after a loss? One way you can be prepared for the possibility of a loss is to go through each room and make a list of all your belongings, or go through and do a live recording of each room, so you have a record of what you own. Once you do this store it in a fireproof place or a safety deposit box. I know it could be a tedious job, but believe me; if you were to suffer a loss, you would be happy you recorded all your belongings.
As I read the last of the Facebook post, I read that this happened early in the morning, they were all up starting their day, when the smoke alarm went off, they quickly assessed what was going on, and was able to get themselves and their animals out safely before the house became engulfed. What if this had happened in the middle of the night? Do you have an escape plan, if you were to experience something like this? So many things to think about, but one thing is for sure, being prepared is very important for the safety of you and your family, so take it seriously, be prepared.
Give us a call at Sky Insurance, let’s review your homeowner’s policy together, and make sure you are properly covered.
Entering the season of giving.
As I sit drinking my coffee this morning, I heard the geese flying overhead, I love that sound. It brings back memories of when I was young, and summer would be coming to an end, we would see the geese fly over, and my mother would say, “fall is coming soon”. Fall has always been my favorite season. It brings changes to the trees, with the many fall colors, the crispness in the air, and the beginning of the holiday seasons.
Each year as the holidays approach, I always start the season saying, I want to give back, or serve in some capacity, whether it be feeding the homeless, or helping a family in need. Each year flies by and before you know it, the season is over, and I didn’t find the time. Last year our company decided to give back to our community, by picking two families during Thanksgiving and Christmas, to bless. We provided full meals and presents. Our whole office enjoyed the act of giving, and it gave us such joy to bless someone.
As the new holiday season approaches, and we start compiling a list of wants for Christmas, I encourage or shall I say, challenge you to take time this holiday season to do something special, volunteer to serve, or pick a family that is having a hard time and bless them. I promise you it will bless you, to be apart of something special, it gives the holidays new meaning. Incorporate your children into this act as well; it helps children to think of ways to help others. Kids love participating in ways to help people, what better way to teach our children how to be selfless and to think of others. It teaches them kindness, love, and acceptance.
This is my challenge for you this holiday season!
Today while listening to the news, they were covering the story of the death of yet, another famous person, who died by suicide. This story saddened me, the pain his family will go through, not just the loss of their father, but a husband and a son, but the pain of not able to help him through his own pain. This story, made me think of the many suicides that we have experience in our own community over the past year.
As a chaplain, I see the suffering that this kind of deaths leaves behind, so many unanswered questions for these families. Over this past year, I have come to appreciate the value of a small community, one that rallies around those who suffer great loss. I’m blessed to be in a ministry that allows me the opportunity, to help families navigate through their sorrow, and find a new normal.
Sky Financial understands the value of community, we love being a part of a community such as ours. We continue to seek ways to give back, and the Chaplaincy is one of those ways, Sky has two Chaplains on our team, and are so blessed that we can provide support to our community in such difficult times. Sky Financial is always seeking ways to give back.
If I could leave you with one thing today, it would be, find ways to bless someone that crosses your path today. Whether it be a smile, a positive word of encouragement or helping someone out with a need, take the time to extend yourself. You never know what someone is secretly going through, and that small act of kindness just may be the one thing that changes their path. Take the time to look up from your mobile devices and our busy lives, and experience the little miracles that happen around you on a daily basis, and reconnect with people, you won’t be sorry.
Written by: Jenny Ebinger
Reflecting on Life Insurance
This morning while having my coffee, I was thinking of my kids and my grandkids. We just spent Easter together; having my kids and my grandkids around is pure joy. Then my mind started to wander, wondering what would happen if I lost one of them, or if I died, how would it change our lives, their lives. As a Law Enforcement Chaplain I have seen the devastation of death and what it does to families, we never know what life has in store for us.
Early on in my career as a Law Enforcement Chaplain, I was on a call with a family where a man had died unexpectedly; he was young maybe in his early forties. He had a wife and 3 children. The wife was a stay at home mom for the past 17 years, they had suffered the effects of the 2008 recession, they had no more savings, and there was no life insurance. As I sat there with the grieving wife and the children, it hit me; this woman and her children not only lost their husband and father, but they lost their financial security. They had nothing to fall back on financially.
I have been a Chaplain for 11 years; and believe me; I have experienced many more calls like this one. Most people think this will never happen to them, but life is full of the “unexpected”. Unless we are diagnosed with a terminal illness, we don’t know when we are going to die. Over the last 11 years as a Chaplain, I have realized that we should always be prepared. Ask yourself, if I die tomorrow; will my family be able to continue to live the life they are accustom too? Will my family lose the house they call home? What debt will my family be left with? No one likes to think of death, but one thing is for sure, death will happen, are you prepared?
Life insurance is a great way to protect those you love from financial devastation. There are many products that would fit anyone’s budget, so when you say, “I can’t afford life insurance”, ask yourself, who would be devastated, or the most effected, if you were to die tomorrow? The grieving process is hard enough on a family; it’s even harder when they have to worry about how they are going to survive financially.
Written by Jenny Ebinger
I’m pretty confident that if you asked anyone who has ever owned a rental property you would get an overwhelming response that it’s not as lucrative or easy as they thought it would be. In fact, owning a rental property can be a major pain, and end up costing you a ton of money!
I certainly don’t mean to be a “Debbie Downer”, and I know that if it’s done right it can be lucrative, but from an insurance agent’s perspective, I don’t see a lot of people doing it right.
So you’re probably thinking, “Well Chris, you are an insurance agent. What do you know about real estate or rental properties? Why should I take advice from you?”
I’m not a real estate agent, and I don’t own a rental property. However, several of my friends/family/clients/co-workers own rentals, and because I insure a bunch of their properties, I’ve had a first hand account of the process, and I’ve learned what to do, and what not to do.
I was recently asked this question by one of our Sky Insurance Brokers clients, and thought I would share the answer here for our readers.
There are a lot of things that go into homeowners and auto insurance rates, one of them being credit. I’ve heard a lot of complaints from people who don’t like the fact that insurance companies use credit in their underwriting.
Some people have absolutely no idea that it’s used in the rate at all.
At the end of the day, there’s not much we can do about it though. Insurance companies have been using credit in their rates for decades, and that’s not likely to change.
By the way, insurance companies don’t pull your credit like a mortgage company or credit card company does. There is no negative impact on your credit as a result of an insurance company looking at it.
When I say “pull” what I mean is that the insurance company is doing what’s called a soft inquiry, which is not the same thing as having your credit pulled (hard inquiry).
When does credit play a role in insurance rates?
It’s important to understand that insurance companies don’t continuously check or monitor your credit. Usually, they only check it when you first get a quote and/or sign up with them in the very beginning.
This means that if your credit score increases (or decreases) your insurance company does not automatically know about it.
So, to my customers question of whether or not his increased credit score will lower his rates, the answer is not automatically.
What has to be done on our side as the agent is contact the carrier the insurance and ask them to do what’s commonly referred to as a “re-score”. This is when the insurance company can re-run the person’s credit (soft inquiry) to see if there is any positive bearing on the rate.
This isn’t something that the insurance company is going to let the agency do every single year, so it’s not worth even asking unless there has been a significant change in your credit score, and only you as the customer would know if that was the case.
If you’d like to get a better handle on your credit rating, it could be helpful to setup credit monitoring. We hope this was helpful! As always, leave us comment below if you have any questions.
Why do my auto insurance rates keep going up even though my car is getting older? At Sky Insurance Brokers, many of our clients ask this question so I would like to address it from a couple of angles.
First things first, even though it’s called car/auto insurance, it covers more than just your car. It should technically be called “auto-owners” insurance, similarly to how home insurance is actually called “home owners insurance”.
It’s important to understand that there are a lot of variables that go into insurance premiums, and with auto insurance, it’s no different.
The insurance company is much more concerned with you crashing into someone and causing them (or yourself) bodily harm, or death, than they are about your car. A car is a material possession which can be replaced.
A human life is not.
When is the last time you looked at your auto insurance policy?
If you look at it you’ll notice there are a lot of different coverages on your auto policy.
Loss of Income
Loss of use
These are all things that you are covered for on your auto policy. How many of them have to do with your car?
How many of them have a price next to them on your policy?
All of them.
Your car isn’t the only thing you’re being charged for on your policy
That’s because auto insurance covers far more important things than your car as mentioned above.
Let me re-phrase that: your car insurance rate isn’t just based on your car.
You’re not the only one…
It’s also important to understand that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all who have different characteristics and risk profiles.
Insurance is all about spreading costs over a large number (risk pool) of people, which each person paying their fare share. That risk pool is constantly changing, and is impacted by a ton of different things, including the overall economic climate.
This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.
That’s what insurance is though — sharing in the cost.
The next time your auto insurance rates go up, take a look at the big picture. Make sure you’re looking at ALL of the coverages, and corresponding rates.
Hope this helps! If you would like to know more about Car Insurance be sure to visit our page dedicated to it.
The season of giving
What a wonderful time of year the holidays bring. Time spent with friends and families, busy schedules with parties and gatherings to attend. It’s a time filled with thanks and hope. The end of the year brings a time to reflect on the blessings in our lives and excitement for the coming new year.
At Sky Financial and Insurance services we are no different. The end of the year brings a lot of busy schedules. Assisting clients with year-end items and new year planning. Holiday parties and client appreciation, along with closing out our own year-end items, makes for a hectic final sprint to the end of the year. But one thing does not get lost on us during this busy time is the blessings in our lives.
Sky was built on the idea of creating an agency to serve people and our community. Service and gratitude is in our DNA and the fabric of our company culture. Our goal has been and will be to use our company to better our region, to take profits and reinvest back into people and causes. Thanks to all of our wonderful clients, that trust us to serve them, we were able to provide a Thanksgiving dinner to a Grandma that is raising her two young grandsons after the unexpected loss of their parents. She was/is struggling to afford the additional responsibilities that life has unexpectedly given her.
So how can you help?
In the month of December we are looking for a family that we would like to provide a meal and gifts so the family can have a proper Christmas dinner and the kids can have some gifts to open and enjoy. If you know of any family that might be experiencing hard times during this holiday season, please let us know. We are hoping you can help us identify a family that could use a little assistance during Christmas. Please email Erik at firstname.lastname@example.org with any recommendation. We thank you and this wonderful community. We hope everyone has a wonderful and blessed holiday season.