If you are closing on your first home, then it's probably also your first time shopping for homeowners insurance in La Canada, CA. While securing the right home insurance sounds simple enough, finding the right coverage can become complicated when you don't understand what type of coverage you may need to protect your investment.
Here are some basic home insurance coverage terms that you should know to help you make a more informed decision.
Perils are the cause of damage or loss covered by your insurance policy, including fire, smoke, wind, water damage, theft, explosion, vandalism, liability etc.
A deductible is the portion of the loss you are covering towards a covered claim before your insurance coverage kicks in. Our suggestion is to choose a deductible that you know you will be comfortable to pay in case of a claim without putting a financial burden on your family. Deductibles may range anywhere between $500 to $25,000. Typically, assuming a higher deductible means a lower insurance premium because you are assuming more responsibility for claims.water damage, and collision.
Your homeowners insurance policy is made up of several different types of coverage. One of the main types of coverage included in your policy is liability. Liability coverage protects you and your family from legal claims that arise due to the following:
Liability insurance will cover the medical and compensation costs of affected parties. This type of insurance will also cover the cost of your legal defense fees, settlement fees, and more should the affected parties decide to sue. Pet-related injuries or damages (assuming that your insurance provider offers coverage for your pet's breed)
Dwelling protection is one of the main coverages included in home insurance policies. This portion of your policy offers coverage for your home's physical structure and all the components attached to the home. It includes flooring, cabinetry, fireplaces, attached garages, deck, and so on. Your dwelling protection will help you pay to repair the damages your home sustains during a covered peril, such as a fire, wind, water damage, theft/burglary, and so on.
This refers to the coverage you have for structures on your property that are not directly attached to your home. For instance, it can refer to things like a detached guest house, fences, carports, sheds, swimming pools, and so on. Other structures protection will usually offer coverage up to 10% of your total dwelling protection (it varies depending on a carrier). So, if your policy offers $250,000 in dwelling coverage, then you will have $25,000 of other structures protection.
This refers to the actual value of lost or damaged property at the time of the loss or damage event. This amount takes an item's depreciation into account.
Is the cost of replacing damaged or lost property at the current market value, without taking depreciation into account.
An Extended Replacement Cost policy will pay up to a specified percentage over an insured's policy limit to fully replace a damaged home. This percentage is often shown as 125%, 150%, or 200% of the stated limit of Dwelling coverage.
Additional living expenses are one of the main types of coverage included in your homeowners insurance policy. If your home is made uninhabitable due to a covered peril, then this coverage will help you cover the cost of temporarily living elsewhere. It will help you pay for things such as hotel stays, temporary apartment/home rentals, restaurant bills, clothing, pet boarding, and so on.
Refers to adjusting your homeowners insurance policy limits to account for increases in costs to replace or repair your home due to inflation.
Refers to a person other than the policyholder who is added to the policy.
An adjuster is a representative of your insurance company who will handle claims. If you call to report a claim, then your adjuster will come out to your home, assess the damage or situation, and then file and payout your claim.
A personal umbrella policy provides excess liability coverage to protect you from large and potentially devastating liability claims or judgments. The coverage offered by umbrella policies extends past your homeowners coverage limits or personal auto insurance policy. It ensures that you do not have to pay out of pocket for particularly expensive liability claims that exceed the primary liability limit of your home or auto policy.
Refers to insurance that goes beyond the actual value of the insured property.
Is a type of insurance that covers all damages or losses except those that are specifically excluded from your policy.
A binder is a temporary agreement declaring that the policy is in effect. It can be used as proof to show that you have homeowners insurance when it is not possible to issue a policy immediately.
Refers to making changes to your existing policy to fill any coverage gaps or uncovered events. If basic coverage is not enough or circumstances have changed, you can increase your policy's coverage limits or add or remove items. Endorsements can be added at the time of purchase, renewal, or any time when your policy is active.
While there are many other home insurance-specific terms that you may be unfamiliar with, these are some of the ones that you are most likely to encounter. However, many other important areas need proper coverage, such as naming a family trust as an additional insured, scheduling jewelry/fine arts, and so forth. Do you need more help with your homeowners insurance in La Canada, CA? If so, then contact the experts at Knight Insurance Services. We are ready to assist you with all your insurance needs today.