Erik Gibson Insurance
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I PROMISE “PERFORMANCE RESULTS” FOR YOU!

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Homeowners Insurance Information

Because everyone's needs are not the same, it is best to consult your agent to help assess your needs and find the insurance policy that is right for you.

What is Homeowners insurance?

Homeowners insurance provides financial protection against disasters. A standard policy insures the home itself and the things you keep in it.

Homeowners insurance is a package policy. This means that it covers both damage to your property and your liability or legal responsibility for any injuries and property damage you or members of your family cause to other people. This includes damage caused by household pets.

Damage caused by most disasters is covered but there are exceptions. The most significant are damage caused by floods, earthquakes and poor maintenance. You must buy two separate policies for flood and earthquake coverage. Maintenance-related problems are the homeowners' responsibility.

Why do you need homeowners insurance?

It is really all about protecting yourself financially if something unexpected happens to your home or possessions. That's important because chances are your home is likely one of your largest investments.

 

  • If your home was destroyed by fire or damaged by a natural disaster, you'd need money to repair or replace it.

  •     If a guest in your home is injured, liability protection and medical coverage help pay expenses.

  •  If you are a victim of theft and vandalism, it can reimburse you for your loss or pay for repairs.

  •  If you are still paying for your home, your lender will require insurance.

 

It is important to know that homeowners insurance is meant to cover unexpected damage, not routine maintenance. Ask your agent to talk about what is covered and be sure to read your policy so you know exactly what's included and what is not.

Things to consider and questions to ask your agent

Here are few things to discuss with your agent that will influence your decisions.

 

  • How much will it cost to rebuild my house and replace my belongings if they are damaged or destroyed? (Ask your agent to talk you through your home's features and the things you own so you can make an informed decision about coverage.)

  • Does the insurance company have a good reputation for customer service? Is it known for paying claims fairly and promptly?

  • What discounts are available? (Ask about multiple policy, security system and fire resistance discounts.)

  • What's the process for filing and settling a claim? (Ask who to call and what happens after you file a claim.) 

 

Understanding The Value Of Your House

We recommend that you purchase an amount of coverage at least equal to the estimated replacement cost of your house. But the choice is yours. Determining your home's estimated replacement cost is important because this will ultimately determine which policy options are available to you. Since it is impossible to predict today what the exact cost will be to replace your home in future, it’s important to have enough coverage to account for unforeseen circumstances.

How to Determine Your Home Insurance Coverage

-Understanding the Value of Your Home

Your home may be the biggest investment you’ll ever make. So if you’re serious about protecting that investment, here is some important information to consider when determining the coverage amount for your home.

Make sure that your home is insured for at least 100% of its estimated replacement cost

To determine your amount of homeowners insurance coverage:

 

  • Get an estimate of the replacement cost of your home.

  • Select the coverage amount that best fits your needs.

 

Understand the difference between market value and replacement cost

The Difference Between Market Value and Replacement Cost

Market value is the amount a buyer would pay for a home, including the land, regardless of how much it would cost to rebuild the home. Replacement cost for this purpose is the rebuilding cost necessary to repair or replace the entire home.

Replacement cost IS NOT:

    -The market value of the home.

   -The home’s purchase price or the cost of the land.

    -The outstanding amount of any mortgage loan.

When buying a new home, be sure to obtain a replacement cost estimate

Before you purchase a new home, make sure that you determine the appropriate amount of coverage needed. Here’s how:

  

  • Ask if a replacement cost estimate is available when you have the home appraised.

  • Or, consult with your local builder association or a reputable builder for an estimate.

  • You can also check with your agent to help you with this process.

 

Be aware of any architectural details or unique building materials that may affect your estimated replacement cost, such as:

 

  • Upgraded bathrooms or kitchens (including cabinets).

  • Finished or partially finished basement.

  • Additional rooms or living space.

  • Custom molding or arched windows.

  • Other unique features.

 

A contractor or appraiser can help estimate your home’s replacement cost

Building contractors or professional replacement cost appraisers are a good source for obtaining an estimated replacement cost of your home. Estimates from these sources should reflect your home’s features, like those mentioned above. If you are unable to obtain a detailed estimate from these sources, your agent can discuss other options for estimating the replacement cost of your home.

Review your homeowners insurance coverage annually to make sure that your coverage meets your needs

Have you recently remodeled or improved your home?

When you upgrade or improve your home, you may increase your home’s estimated replacement cost. Your agent will then help you adjust your policy to meet your coverage needs. As part of your policy’s provisions, you have 90 days to notify us of any remodeling or additions to your home that increases its value by $5,000 or more.

Has the rate of inflation risen since your last appraisal?

We provide coverage that automatically adjusts each year in an effort to compensate for increases in construction costs in your area. However, certain conditions such as severe weather can increase the demand for labor and materials, and raise costs beyond normal inflation. It is important to update your coverage amount each year to keep up with the changing economy.

What influences the building costs in your area?

Market conditions in your area may impact the amount it will cost to rebuild your home if you experience a loss. Replacement cost estimates are influenced by supply of labor, demand for labor, and the cost of construction materials. Keeping up with the current market conditions in your area and changing your coverage amount accordingly, will help you maintain coverage at least equal to 100 percent of the estimated replacement cost coverage for your home.

If you have any questions, contact your agent or visit www.erikgibsoninsurance.com

All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements.

Taking A Home Inventory

Along with insuring the value of your house, you'll also want to be sure your personal property is insured for the right amount. To do this, you should have a detailed list of your personal property and its value. Let help you get started documenting your possessions.

Get A Quote:

If you have any questions, contact your agent or visit www.erikgibsoninsurance.com

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