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Homeowners Insurance and Liability Coverage: What You Need to Know

Homeowners Insurance and Liability Coverage: What You Need to Know > Homeowners Insurance and Liability Coverage: What You Need to Know

Homeowners Insurance and Liability Coverage: What You Need to Know

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Most people think of home insurance as the safety net for when the chimney catches fire, when the pipe bursts or when the alarms fail and burglars make off with all the valuables. However, there are some often-overlooked benefits of home insurance that can help you out of otherwise devastating financial situations.

One of the most important aspects of your home insurance policy is personal liability coverage. You might not expect to ever be sued for an accident that occurs on your property, but if you are, you could end up owing thousands of dollars in damages. Personal liability coverage helps to protect your personal assets should this situation ever arise.

Here's what you need to know about liability coverage for your home.

What's Covered by Your Policy?

You might be surprised by the extent of your personal liability coverage. Generally, these policies provide compensation for lawsuits resulting from accidents on your property. This compensation usually includes:

  • Pain and suffering claims. For injuries that cause lasting pain and emotional trauma, the costs can add up.
  • Lost wages. A person may lose work because of an injury.
  • Medical bills. These are often the most expensive part of a settlement.
  • Wrongful death payments. If a person is killed, their families can still be compensated financially for the loss.
However, personal injury compensation through your insurance can also help you stay covered when you're away from home. For example, if you attend a gym on a daily basis and accidentally injure another patron on the running track, that patron could bring a personal injury lawsuit against you. Your home insurance covers your own negligence in most accidents, even when you're not at home.

Every person in your home can enjoy this coverage. Your teens and children may cause accidents away from home, and your insurance can help bridge the gap. Even damage to property might be covered.

For example, if your teen was mowing the lawn and caught a large rock in the blades that was thrown into the window of the neighbor's home, liability coverage would also help to pay for the damage to the other person's property and any people who might have been injured by that damage (e.g. cuts from the glass).

However, there are some limitations to personal liability coverage. While this coverage provides compensation for others who are injured on your property or by your actions, you cannot claim these benefits for yourself if you are injured at home.

Also, intentional actions against another person are not covered. For example, if you assault someone by throwing a punch, that person can sue you for personal injury, but your insurance would not usually be required to pick up the slack.

How Do You Know If You Have Enough Coverage?

Most home insurance policies do have a cap for how much the insurer will pay in damages. That cap may not be enough for some injuries, which can go into the millions for some types of more serious injuries. In order to know if you should increase your liability coverage through your insurance, you need to consider whether people are at a higher risk of injury when they visit your home.

Here are two common situations where increased coverage may be a good idea:

  • You have a swimming pool. Swimming pools increase the risk of injury and death to visitors exponentially. When you routinely have young children visiting to use the pool, extra coverage is not just a good idea -- it's essential. Average liability policies provide about $100,000 in coverage. Pool-related injuries can be much more expensive.
  • You have a higher-risk lifestyle. Visiting places like the gym or dance classes makes it more likely that you can injure someone else. If you routinely enjoy high-adventure activities like boating, rafting or gliding, it's also a good idea to increase your coverage.
  • Your property is vast and provides a number of more risky attractions. Farm equipment, untamed woods or many outbuildings can cause more incidents of injury.
  • You have pets and animals. Horses, dogs and farm animals like goats can bite and stomp. Dog bites may cause intense trauma, and injuries from horses can also be quite serious.
The best way to know if you have enough coverage and what the limits of your policy are is to talk with an insurance agent. You might find you want to improve your policy beyond the standard amount.

Will You Need Additional Coverage Beyond What Home Insurance Can Provide?

Sometimes, insurance providers only allow liability coverage through home insurance to go so high. After that, you might need to take out an additional policy. These policies are umbrella policies that provide much higher coverage at a reasonable monthly fee. Umbrella policies do also have some limitations: you can't use the policy to cover costs of injury that are linked with criminal activity.

For more information about the coverage your home insurance can provide, contact us at Crowel Agency, Inc.

Insuring What You Own Against Tornadoes

Insuring What You Own Against Tornadoes > Insuring What You Own Against Tornadoes

Insuring What You Own Against Tornadoes

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Although tornadoes vary in intensity, the financial losses to victims can be devastating. Fortunately, having the right types of insurance coverage helps restore your life back to normal following the destruction a tornado leaves behind.
While you don't need special tornado insurance, you do need to make certain that your standard home insurance policy and current auto policy are enough to cover the damage.

Tornado Risk
Tornadoes can occur anywhere in the United States but are more common in certain regions including the Midwestern states, Mississippi Valley, northern Great Plains area and the southern United States.

If you live in an area where tornadoes are a risk, you'll need insurance to help cover the loss should disaster strike. For starters, a home insurance policy that covers wind events, including tornadoes.

Home Insurance Coverage
If you live in a tornado-prone region of the country, you need home insurance that helps cover damage to your home and the loss of personal property.

State and federal programs often offer disaster assistance in the form of low-interest loans in areas ravaged by tornadoes, but without home insurance, you aren't likely to get enough money to replace everything you've lost. Therefore, there are several factors to consider when buying home insurance.

Replacement Cost
Although insuring your home for the amount it would take to rebuild it instead of insuring it for its current market value increases your premiums, it's important to have adequate coverage.

Even if a tornado leaves your home standing, winds, rain and flying debris can do serious damage. However, if you are under insured, you may fall short of what it costs to repair the damage or replace all that you've lost.

While replacement cost does not deduct depreciation costs for age when you insure the structure of your home, your policy may limit the payout to a specific dollar amount. If you worry that you'll need more, extended replacement cost offers additional coverage beyond the limit set in your policy. This can give you extra cash you may need to meet rising construction and labor costs in a disaster-stricken area.

Content Insurance
Your home may receive extensive damage or be destroyed if it lies in the direct path of a tornado, but the contents inside your home are at risk too. You will have to spend a lot of money to replace everything you lose. That's why your home insurance policy should include plenty of personal property coverage.

Insuring your home's contents for replacement value costs more, but it will give you the money you need to replace damaged or lost possessions with new items of similar kind and quality. In contrast, actual cash value coverage reimburses you for the loss of personal property at depreciated value. In other words, the insurer only reimburses you a percentage of what an item originally cost.

If you're worried that a loss exceeds your policy's coverage limits, you can increase the coverage limit for your personal property. You can also add an endorsement that provides extra coverage for valuables for which your existing home insurance policy provides only limited coverage.

Loss-of-Use Coverage
If your home is destroyed or incurs serious enough damage, you may have to live somewhere else temporarily while your house is being rebuilt or repaired. Loss-of-use coverage helps pay for additional living expenses such hotel bills, eating out or paying rent during the time you are displaced.

Read your home insurance policy carefully as many insurers place limits on how long they will reimburse you for these costs. Generally, there is also a dollar limit on how much an insurer will pay out.

Some insurance companies may pay a flat dollar amount; others offer a percentage of the limit for which you have your home insured. In either case, your insurance company will continue to pay for additional living expenses until your home is repaired, you move to a new permanent address or you use up the limit stated in your policy, whichever occurs first.

Auto Insurance Coverage
Tornado damage to your home isn't your only concern. High winds and falling trees can damage vehicles. Consequently, you need comprehensive auto insurance to cover damage to your vehicle that a tornado causes.

Although comprehensive insurance generally is an optional coverage, it covers damage to your vehicle that isn't due to a collision. Comprehensive insurance covers wind damage — even wind from a tornado that tosses your vehicle or causes damage from flying debris.

The cost of comprehensive insurance depends on your driving history, a vehicle's value and the amount of the deductible you choose. If your policy has a deductible, that deductible is separate from the deductible you pay for collision insurance.

When you are uncertain about how to insure all that you own, the insurance agents at the Crowel Agency, Inc. can help you make sure that you are insured against the hazards for which your property is most at risk.