Homeowners Insurance...Frequently Asked Questions

How do I prepare a home inventory?

Preparing a home inventory is the most important step in protecting your household items and personal possessions. By having a home inventory, claims can be settled easily by having a detailed description of your personal property.

Follow these steps:

• Take a notebook and go from room to room listing your personal belonging with exact or estimated replacement cost.
• Make sure you include all rooms, such as closets and clothes, storage rooms, anything you may have stored in the attic or basement, including outside storage rooms.
• It is even more helpful if you can video or photograph all personal item and property. Make sure you video or take photographs of both the inside and outside of the home.
• It is best to store your videos or photographs in a safe deposit box for safe keeping.
• Make sure you list all personal property, such as, jewelry, watches, coins, collectible items, wall art, antiques, etc.

What is the different between replacement cost and actual cash value?

Replacement cost is defined as...the cost to replace a damaged or destroyed item of property, without deduction for depreciation. It is best to have replacement cost with your homeowners policy. As property goes up in value, replacement cost will pay what it will cost to replace the item today.

Actual Cash Value is defined as...the cost to replace an item of property at the time of loss, less an allowance for depreciation. If your homeowners policy has ACV (actual cash value) you need to update your policy with replacement cost.

Example...take for instance, you paid $1500 for your television, four years ago. The same tv cost $2000 to replace today. With a depreciation of 10% a year or 40% of the $2000 replacement cost, the Actual Cash Value you would receive is $1200.

Homeowners Scheduled Personal Property:

The homeowners policy is designed for use by the "average" homeowner. Many homeowners have needs that exceed the coverage limits of the homeowners policy.

Example...Mrs. Smith has a ring that is valued at $10,000. Mrs. Smith's homeowners policy limit is $1500 for jewelry. In order to insure the ring at it's full value, Mrs. Smith would have to list the ring as a Scheduled Personal Property endorsement. Any item that is valued for more than the policy limit, needs to be listed in a scheduled personal property endorsement. This includes jewelry, furs, cameras and equipment, musical instruments, silverware, golf equipment, fine arts, postage stamps and coins.

Note: The policyholder should have all items appraised and documented in their file for items contained in Schedule Personal Property.

What discounts can I get on my homeowners policy?

• Insurance companies offers a variety of discounts for homeowners. Including a discount for newer homes, with the discount being greater for the newer the age of the home.
• Multi line discounts are also available. If someone has their auto, life or health insurance with the same company, a discount of up to 10% is available on their auto and homeowners policy.
• Insurance companies also offer a discount for home security and alarm systems that are connected to a monitoring service.
• Many insurance companies offer a claims free discount.