If someone were to suffer a serious injury in my home, and I was found liable, how would I fare?

The standard level of liability protection in homeowners’ policies has been $100,000 but it’s rising all the time (surprise!). Today, $300,000 or more is not an uncommon amount, and even higher levels are recommended for homeowners with lots assets to protect. For example – How much is your home worth? Will $300,000 cover it? Probably not.

In this situation, umbrella policies have become popular. These policies provide excess liability coverage on both your homeowners and automobile policies, and are not expensive.

How much will I be paid for damage to my personal property?

Remember that homeowners insurance is designed to cover general personal possessions, not valuable collections like antiques, jewelry or original art. Insurance companies deliberately limit their coverage of expensive possessions so that household premiums are more affordable to everyone. After all, if they had to cover museum-level art collectors under standard homeowners policies, we would all end up paying higher premiums to cover those expensive items.

Your policy lists the specific monetary limits for personal property under what is called “Special Limits.”

Those limits usually are:

• $200 for money, bank notes, gold and silver (other than goldware and silverware), platinum, coins, and medals.
• $1,000 on securities, accounts, deeds, evidences of debt, letters of credit, notes (other than bank notes), manuscripts, passports, tickets, and stamps.
• $1,000 on watercraft, including their trailers, furnishings, equipment and outboard motors.
• $1,000 on trailers not used for watercraft.
• $1,000 for loss by theft of jewelry, watches, furs, precious and semiprecious stones.
• $2,000 for loss by theft of firearms.
• $2,500 for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware and pewterware.
• $2,500 on property on the resident premises, used for business, and $250 on this property damaged or lost away from the premises.

If these limits seem low to you (maybe that engagement ring is worth much more than $2,500), you may wish to talk to your agent about additional coverage for specific items.

Help! I’ve lost everything! Where do I start?

If most of us suddenly found ourselves without anything due to some calamity, we would be hard pressed to know all that we had lost. When was the last time you counted the number of shoes you own or CDs, not to mention furniture, dishes, drapes, or audio and video equipment? The list goes on and on. How much is it all worth and where would you start if you had to replace it?

Now is the time to make a list of major household items and possessions. The handy inventory form at the back of this guide will make your job easier. Just remember that, where possible, it is wise to list the serial number, date and cost of purchase, and even include the receipt if you can.

Another easy way in preparing a home inventory is to use a video camera or take pictures of your home and its contents. As you take the video, you can also talk about the items and their date and cost of purchase.

Whichever method you choose, have a copy made and ask a friend or family member to hold on to it. Or store your copy in a safe deposit box. That way if the worst happens and your home is destroyed, the inventory list will be safe at another location.

What do I do when my property is damaged or stolen?

Contact your agent as soon as possible. If there is damage to your home or possessions make “emergency” repairs to protect yourself and your property from further damage, then call your agent. For example, if some of the windows in your home have been blown out by wind, you may board them up to prevent additional damage. In fact, your policy covers the cost of these emergency measures.

However, before setting about to make permanent repairs, call your agent. The insurance company has the right to inspect the property in its damaged condition. They may want to send a claims adjuster or instruct you to get an estimate from an independent contractor.

If you have property stolen, notify the police immediately and call your agent.

What if my ID and credit cards are stolen?

Identity theft is on the rise and can cause not only monetary loss but time to correct and repair. Coverage may be included or available via an inexpensive add-on endorsement to your policy. It is well worth the expense. Check out Identity Theft Coverage page for more information

What if I am sued or found liable for injury to another person?

Liability covers bodily injury and property damage to others due to your negligence. The coverage applies to non-auto accidents that occur either at your residence or off the premises. Medical expense payments such as first aid can also be due to the injured party. Should you be sued or suspect that you may be, contact your agent immediately.

Why does the insurance company want to know where the nearest fire hydrant to my home is?

The insurance company has to weigh many factors in determining a premium to charge for your policy. One factor is access to water (hence the question about the location of the nearest fire hydrant) as well as the dependability and nearness of your local fire company and police. Rural homes more than five miles from a water supply are more at risk for severe damage from fire and lightning. Therefore, they can be more expensive to insure and rural homeowners may even have difficulty obtaining insurance.

Other factors are, of course, the age and construction of your house. Generally, brick and stone homes are cheaper to insure than ones constructed of wood.

The number and dollar amount of lawsuits in your state can also influence your premiums. Residents in states that experience a large number of lawsuits or of verdicts in excess of $1 million may face higher premiums to cover the cost of those suits.

Who keeps an eye on the insurance companies?

Insurance is a heavily regulated industry. Every state has a government department that regulates and monitors every insurer operating within the state’s borders. In addition to approving rates, your state’s insurance department is involved in all insurance matters on behalf of private citizens and businesses. It also issues operating licenses to insurers and agents, based on their ability to meet the state’s requirements for conduct and knowledge about insurance issues.

Your insurance company and agent work closely with your insurance department to make sure you are getting the best and fairest possible service within the state’s guidelines. If you ever have difficulty settling a claim, work with your agent to resolve the difficulty. However, you can also contact your state’s insurance department if you wish to know more about your options and rights as an insurance consumer.