Home insurance provides financial protection for your home and its contents in the event of damage. Compensation is typically based on current market value or replacement cost, depending on your policy and coverage limits. Erie offers a wide selection of home insurance policies at very competitive prices, with consistently high customer satisfaction and significantly fewer complaints than comparable companies.
1. Structure Coverage
Structure coverage, also known as “Coverage A,” protects the structure of your home from damage caused by covered perils, including damage to yourself and attached structures (such as porches or patios) and built-in appliances (such as refrigerators and ovens). Your home insurance policy may or may not include flood and earthquake coverage, depending on your location; you may need to purchase separate policies for these.
When determining the necessary structure coverage, it’s important to consider local building costs, the characteristics of your home, and your lifestyle. In general, it’s wise to purchase structural insurance that covers your home’s current replacement cost, rather than its market value.
2. Homeowners Insurance
Whether you’re a homeowner or renter, and for whatever reason, homeowners insurance should be an essential part of any policy. This insurance covers clothing, electronics, and furniture that can be easily moved within the home, as well as temporary housing costs in the event the home becomes uninhabitable due to fire or other covered risks.
One way to ensure you have adequate homeowners insurance is to take an inventory of your household goods and estimate the value of all items. This will help determine whether additional homeowners insurance provides adequate protection for valuables such as jewelry or artwork.
3. Liability Insurance
Homeowners insurance covers liability for accidents and personal injury to your property, including medical expenses, legal fees, and damages resulting from lawsuits against you. It also covers damage to your property, with a maximum liability limit as specified in the policy.
Home insurance provides essential protection for your largest investment and personal belongings. It protects you against financial losses due to unforeseen events, offers liability insurance, and can cover additional expenses, such as property loss due to uninhabitability. Each insurance company has its own guidelines and policies regarding home insurance.
4. Temporary Lodging Expenses
Home insurance is a valuable way to protect one of your most important investments: your home. However, its complexity can be overwhelming due to the variety of policies, coverage options, and deductibles.
Some home insurance policies include Additional Living Expenses (ALE) coverage, which covers the costs of temporary housing, such as rent, hotel stays, and meals, if your home becomes uninhabitable due to an insured risk. This coverage can have daily and aggregate limits, so read the policy terms carefully and consider your individual needs during the decision-making process.
5. Umbrella Insurance
Home insurance protects one of your most important investments by covering risks related to personal property, liability for home accidents, and other situations that can arise in the home. An ideal policy not only protects the structure of your home and your personal belongings but also covers additional living expenses in the event of a covered loss, such as a forced relocation due to an insured event.
Umbrella insurance offers additional liability coverage that allows you to compensate for third-party damages that exceed the limits of your existing home, auto, or boat insurance, such as claims arising from tort claims, libel, or slander.
6. Flood Insurance
Many home insurance policies do not cover flood damage; to protect yourself against flood damage, you can purchase a National Flood Insurance Plan (NFIP) policy, administered by the Federal Emergency Management Agency (FEMA). This policy covers direct property damage caused by flooding.
Most NFIP policyholders may be eligible for an additional reimbursement called “Increased Compliance Costs (ICC)” for raising, demolishing, or relocating their home to protect against future flooding. This coverage goes beyond standard home insurance. Personal property coverage in a standard homeowners insurance policy typically covers personal belongings.
7. Replacement Cost Coverage
Home insurance protects your home and the buildings within it against damage caused by fire, storm, or other covered disasters. Depending on your chosen policy, it can cover up to 70% of your home’s value. It’s advisable to inventory your valuables beforehand to ensure you’re adequately insured.
Home insurance typically pays out based on current market value or rebuilding value. Rebuild value is the preferred option because it allows you to rebuild your home using comparable materials without accounting for depreciation. Some policies even offer an agreed-upon value option, where you and the insurance company agree on a valuation of the home before an incident.
8. Coverage for Other Buildings
Home insurance offers various coverage options. In addition to the home itself, many policies also cover other buildings on your property and can also cover the additional costs of temporary housing if you need to evacuate after a disaster due to home repairs. Coverage for other buildings is typically a percentage of your building’s insurance limit and usually doesn’t require an additional premium. For homeowners with outbuildings (such as sheds, barns, and detached garages) who require coverage, 10% of the coverage limit may not be sufficient. In such cases, increasing the coverage limit may be more prudent.
9. Coverage for Other Risks
Home insurance policies typically fall into three categories: basic, comprehensive, and specialized. While the terms and coverage may vary slightly between insurers, most policies generally follow a standardized format known as the “formula” for home insurance.
Basic policies provide coverage for specific risks; comprehensive policies cover a wider range of risks but are limited to specific risks; and specialized policies provide comprehensive coverage, including the home, personal belongings, additional living expenses, and personal liability. You can expand your home insurance coverage by purchasing additional coverage. Specific events like earthquakes and power outages can cause losses, which these additional premiums can cover.
