Why is my insurance value more than the market value of my house?

What is coverage A? B? C? D?

Do I automatically get replacement cost on my contents?

How do I lower my Homeowners premium?

Am I covered for Flood or Earthquakes?

Am I covered for Sinkholes?

How does my home based business affect my homeowner policy?

Insurance Value versus Market Value
An insurance policy is based on Replacement Cost, not Market Value. Even though you may be able to buy a home in a location similar to yours, can you rebuild at the same price? Since most homeowners want their property replaced when they have a claim, then we use the replacement value, which may be more than the current market value. It might not make sense now, but when you have a claim you will be glad you had enough insurance.

Homeowner Policy Coverage
Coverage A is your building limit. Coverage B is your other structure limit used to cover detached garages, sheds, barns etc. Coverage B is 10% of your coverage A limit. So, if your home is insured for $150,000, then you have $15,000 to use for other structures on your property.Coverage C is your content limit, such as clothes furniture, TV’s, computers etc. This limit is typically 50% of Coverage A. So, if your home is insured for $150,000, then you would have $75,000 to use towards your personal property. Coverage D is your loss of use of your home. In the event of a fire or other serious claim, and you have to move to a hotel or other residence, it will pay for the added expenses you incur, such as rent, hotel costs, utilities etc above what you would have normally paid had you not had a claim.

Replacement Cost on your Contents
Replacement cost is given automatically for your building, but not for the stuff inside. This is an additional coverage and needs to be endorsed, or added, to your existing homeowner policy.

Lowering your Homeowner Premium
Check out our money saving tips section to see how you can save money on your homeowner’s premium.

Coverage for Floods or Earthquakes?
Due to the catastrophic nature of these natural disasters, they are not covered by a Homeowner policy. You must purchase this coverage separately, and premiums depend on your proximity to the flood plain or fault zones. Contact your agent if you think you might be near one of these exposures.

Sinkholes
Central PA is known for its limestone, and also for its acid rain, which creates sinkholes in the most unlikely, and inconvenient places. Sinkholes are usually covered under your policy if the building is damaged as a result of the sinkhole. Otherwise, ground and dirt is not covered and you would have to fill these holes on your own. If you think you might be near an area prone to sinkholes, contact your agent to see if this coverage is provided by your policy.

Businesses in the Home
Home-Based Businesses create a unique liability exposure that is not usually addressed properly by a Homeowner Policy. Business Liability is excluded unless you have an endorsement on your policy extending liability coverage to your business. Business use also affects how your property coverage will respond in the event of a claim. Please contact your agent if you have a home based business to make sure you are properly covered.