Home Insurance

Other Insurance Issues

Make sure your most important investment is properly protected.

All policies will include both property insurance (typically with a $250 deductible) and personal liability insurance with no deductible. Let’s look at some other issues:

• Other structures. Your garage, tool shed, etc. should be covered up to 10% of the insured value of the home itself. Be careful here: If you have an office or side business in a separate structure, it will not be covered by your homeowners insurance.   
• Contents insurance. These items are usually covered up to half the insured value of the home. A $100,000 policy, for example, typically provides $50,000 in contents coverage. You can increase this to 70%. Some types of personal property, such as motorcycles may be excluded entirely while others, such as silverware and similar valuables can be purchased by getting a floater.   
• Living costs. These are incurred if you live elsewhere, in a motel or hotel, for instance, while repairs are being made due to damage caused by an insured risk.   
• Other properties. This includes possessions of children who are away at school or those possessions at another property you may own.  Usually coverage is for up to 10% of the insured value of the contents of your primary home.
• If you’re single, and buying as live-togethers, be very careful about your insurance. Some companies will cover all owners on one policy, others will not. If you suffer a theft, and the policy doesn’t have your name on it, you won’t be covered if it was your property that was stolen.
• Umbrella policies. If someone slips and falls on your walk, your personal liability coverage will foot the bill, usually up to a maximum of $100,000 per occurrence for damages plus $1,000 in medical payments. Since damage awards are so high today, consider increasing this limit. It’s wise to have an umbrella policy. This type of policy is available in addition to a basic policy. It is typically for $1 million or more. The premium for such coverage is modest, usually $200 to $300 annually. Umbrella liability coverage does require underwriting and may not be available in certain situations.

Many states require the purchase of worker’s compensation insurance for your domestic household workers as part of your homeowner’s policy. The rules in each state vary widely, so check with your insurance broker or state employment office to see how this affects you.

• Medical Payments. This coverage is for injuries that occur on your property, up to a maximum of typically $1,000 per occurrence to you or others.
• Other Damage. This pertains regardless of fault, with coverage typically up to $500. You’ll use this if your child hits a baseball into your neighbor’s living room window.