Real Talk: A homeowner’s peace of mind

Real Talk: A homeowner’s peace of mind
File photo There are a variety of homeowners' insurance policies that will help protect your greatest asset from flooding, earthquakes, theft or even equipment breakdown.

By Bill Howard

Imagine you return home from a trip to find a burst pipe on the second floor of your home, water cascading down the stairway and through the light fixtures. Now is not the first time you should be reading your homeowners policy.

A home is the greatest asset for most people, yet how carefully do you review the insurance policy protecting that asset? There are significant coverage differences between insurance policies with numerous endorsements available to improve your protection. At claim time, coverage matters. Here are a few coverages you should consider.

Replacement cost dwelling

Replacement cost is how much it would cost to rebuild your home as is, with the same level of detail and finishes. It considers costs at the time of a loss, such as materials, labor, architect and designer fees, lighting and custom design finishes. With labor shortages and skyrocketing construction material costs, is your current limit adequate?

Some companies guarantee the replacement of your home regardless of the coverage limit. If you own a historic home, you will want to make sure your insurance company specializes in the replacement of the unique features of a historic home.

Replacement cost for personal property

Make sure your belongings are covered for the amount it costs to replace them today, without deduction for depreciation, up to the limit you chose on your policy.

Equipment breakdown

Equipment breakdown coverage includes the breakdown of residential equipment that is permanently installed to service the home. This covers heating and cooling systems; appliances; water heaters; swimming pool equipment; well pumps; permanently installed generators and transfer switches and permanently installed home automation and security systems. It also covers elevators, except for select components that may be underground.

While equipment breakdown is not intended to cover “wear and tear” issues that occur on older equipment over time, it can provide coverage for “out of the blue,” sudden and accidental breakdown.

Sewer and drain backup

Water is the number one cause of loss in the insurance industry. Homeowners policies generally exclude damage resulting from water backing up through sewers and drains. Coverage is available by endorsement.

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Flooding is more than just a river overflowing the banks. Flood losses may also result from heavy rainstorms or broken water mains. Every property is in a flood zone, some more hazardous than others. Coverage is available as an endorsement to your homeowners policy or from a separate flood policy.


Earthquake coverage is excluded from all homeowners policies. Coverage may be added by endorsement.

Cyber liability

Today, online crime is on the rise like never before. The simplest of activities, like checking your email on your smartphone or letting your kids download the latest app on their tablets, could expose you and your personal data. Cyber endorsements provide coverage for data restoration; identity theft resolution; forensic assistance; cyber extortion; cyberbullying; breach of privacy; cyber disruption and cyber financial loss. Who do you call in the event of a breach? Having this coverage can help. Not all companies offer cyber endorsements and coverage varies by company.

Valuable items coverage

Homeowners policies contain limitations on some classes of contents unless items are scheduled on a valuable items policy. Most common limitations are for jewelry, furs, firearms, stamp and coin collections and breakage of statuary or glassware. Although not subject to internal policy limits, you should also consider scheduling coverage for items such as wine collections, musical instruments and antiques or collections of items with exceptional or one-of-a-kind value. Scheduled items generally are not subject to a deductible.

Personal liability

These days, just about anyone can be sued due to their actions. Whether it’s a guest injury at your home, a dog bite, an accident on the ski slopes or damage to a neighbor’s property, your homeowners policy can offer personal liability coverage for you and your family from lawsuits arising from third party liability claims.

Coverage is not limited to your home and provides protection for injuries occurring away from your residence. Defense costs for a lawsuit are provided, even if the claim is groundless, false or fraudulent.

Personal injury liability

As stated above, your homeowners policy includes personal liability coverage for claims resulting from bodily injury or property damage to others. An option is available to extend your liability coverage to include claims resulting from libel and slander.

When it comes to protecting your greatest asset, an online search for the cheapest cost should not be your game plan. This is not a one size fits all purchase. Find a knowledgeable agent to help develop an insurance program to fit your needs.

Hopefully you will never have to use your insurance policy, but if you do, a broad insurance policy will be important. When was the last time you reviewed your policy? A coverage review could be well worth your time.

The writer is account executive at Clarke & Simpson.