Mennonite Homeowner Insurance
Homeowners Insurance
What follows is a general description of homeowners insurance. Policies vary, so there may be slight differences between your current policy and what is stated. This is not an exact description of the Mennonite Aid Plan homeowners policy, but what is said here would be true of our policy. To get an instant quote for our policy, click HERE
Insurance is designed to protect against unexpected, sudden, accidental losses. You should not expect insurance to cover intentional acts or losses that occur gradually and could be prevented. Insurance policies have limits and deductibles that cap the amount of a claim payment.
A standard homeowners insurance policy includes four types of coverage:
1. Property protection for your home and related private structures (Coverage A & B).
2. Property protection for your personal belongings (Coverage C).
3. Additional living expenses you incur because of a covered loss (Coverage D).
4. Liability protection (Coverage E & F).
Two things have to happen before your homeowners insurance company will pay a property claim. First, the cause of loss must be covered by your policy. Fire, wind, broken water pipe and theft damage are common covered causes of loss. Wet rot, ground settling, tree root and flood water damage are common causes of loss NOT covered. Also, many losses are not covered if your home is vacant, because there is a much greater chance of damage occurring.
Second, the property must be covered by your policy. Your policy covers your home and your personal property, not your neighbor’s or employer’s property. However, even some of your property is not covered, such as land, animals, plants, boats and vehicles.
Coverage A - Your policy pays to repair or rebuild your home if it is damaged or destroyed by a covered cause. When purchasing coverage for the structure of your home, buy enough to rebuild your home. This is known as “replacement cost value” and is unrelated to what you could sell your home for. Replacement cost va lue takes into account the cost to clean up debris after a loss, hire an architect to draw up plans, pull building permits, purchase building supplies, and hire contractors to rebuild your house with the same style and quality of materials you have now. If you have an older Victorian home with 10' ceilings, your rebuilt home would have 10' ceilings. If you live in a remote area of Fresno County, labor and supplies may be more expensive than in suburban Portland. Unlike the wild fluctuations in market prices, rebuilding costs tend to rise steadily.
Coverage B - Your policy also covers structures that are detached from your home such as a garage, tool shed, fence or gazebo. Generally, these structures are covered for about 10% of your Coverage A amount, but you can get more. Again, buy enough coverage to replace these other structures.
Coverage C - Your furniture, clothing, sports equipment and other personal items are covered if they are stolen or destroyed by a covered cause. Most companies provide coverage for 50% or more of the amount of insurance you have on your home. So if you have $300,000 of insurance on the structure of your home, you would have at least $150,000 of coverage for your belongings. The best way to determine if this is enough coverage is to conduct a home inventory. Then keep that inventory where you can get to it if your home is destroyed.
Expensive items like jewelry, furs, collections, artwork and silverware are covered, but there are usually sublimits for these classes of items. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for it's appraised value.
Coverage D - If you incur additional living expenses because of a covered loss, you can be reimbursed. Typical expenses would include hotel bills, restaurant meals because you cannot live in your home during the cleanup and repair of a disaster. It would include the extra electricity needed to run the drying equipment in your home after a water accident. Normal, ongoing expenses, such as your mortgage payments, are not covered.
Coverage E - You are responsible for the harm you cause to others. The liability portion of your policy defends you in court AND pays court awards up to the policy limits. You are covered not just in your home, but anywhere in the world, including Spokane and Rancho Cucamonga. As with any insurance, not all causes of harm are covered. Generally, insurance covers accidents that you should have prevented. Liability limits of $300,000 are common and go up from there. You can purchase an umbrella or excess liability policy which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits.
Coverage F - Your policy provides no-fault medical coverage. If a friend or neighbor is injured in your home, he or she can be reimbursed for their medical bills. This way, minor expenses are paid without filing a liability claim. Coverage limits are low, usually in the $5,000-$10,000 range. This does not cover your medical bills.
What follows is a general description of homeowners insurance. Policies vary, so there may be slight differences between your current policy and what is stated. This is not an exact description of the Mennonite Aid Plan homeowners policy, but what is said here would be true of our policy. To get an instant quote for our policy, click HERE
Insurance is designed to protect against unexpected, sudden, accidental losses. You should not expect insurance to cover intentional acts or losses that occur gradually and could be prevented. Insurance policies have limits and deductibles that cap the amount of a claim payment.
A standard homeowners insurance policy includes four types of coverage:
1. Property protection for your home and related private structures (Coverage A & B).
2. Property protection for your personal belongings (Coverage C).
3. Additional living expenses you incur because of a covered loss (Coverage D).
4. Liability protection (Coverage E & F).
Two things have to happen before your homeowners insurance company will pay a property claim. First, the cause of loss must be covered by your policy. Fire, wind, broken water pipe and theft damage are common covered causes of loss. Wet rot, ground settling, tree root and flood water damage are common causes of loss NOT covered. Also, many losses are not covered if your home is vacant, because there is a much greater chance of damage occurring.
Second, the property must be covered by your policy. Your policy covers your home and your personal property, not your neighbor’s or employer’s property. However, even some of your property is not covered, such as land, animals, plants, boats and vehicles.
Coverage A - Your policy pays to repair or rebuild your home if it is damaged or destroyed by a covered cause. When purchasing coverage for the structure of your home, buy enough to rebuild your home. This is known as “replacement cost value” and is unrelated to what you could sell your home for. Replacement cost va lue takes into account the cost to clean up debris after a loss, hire an architect to draw up plans, pull building permits, purchase building supplies, and hire contractors to rebuild your house with the same style and quality of materials you have now. If you have an older Victorian home with 10' ceilings, your rebuilt home would have 10' ceilings. If you live in a remote area of Fresno County, labor and supplies may be more expensive than in suburban Portland. Unlike the wild fluctuations in market prices, rebuilding costs tend to rise steadily.
Coverage B - Your policy also covers structures that are detached from your home such as a garage, tool shed, fence or gazebo. Generally, these structures are covered for about 10% of your Coverage A amount, but you can get more. Again, buy enough coverage to replace these other structures.
Coverage C - Your furniture, clothing, sports equipment and other personal items are covered if they are stolen or destroyed by a covered cause. Most companies provide coverage for 50% or more of the amount of insurance you have on your home. So if you have $300,000 of insurance on the structure of your home, you would have at least $150,000 of coverage for your belongings. The best way to determine if this is enough coverage is to conduct a home inventory. Then keep that inventory where you can get to it if your home is destroyed.
Expensive items like jewelry, furs, collections, artwork and silverware are covered, but there are usually sublimits for these classes of items. To insure these items to their full value, purchase a special personal property endorsement or floater and insure the item for it's appraised value.
Coverage D - If you incur additional living expenses because of a covered loss, you can be reimbursed. Typical expenses would include hotel bills, restaurant meals because you cannot live in your home during the cleanup and repair of a disaster. It would include the extra electricity needed to run the drying equipment in your home after a water accident. Normal, ongoing expenses, such as your mortgage payments, are not covered.
Coverage E - You are responsible for the harm you cause to others. The liability portion of your policy defends you in court AND pays court awards up to the policy limits. You are covered not just in your home, but anywhere in the world, including Spokane and Rancho Cucamonga. As with any insurance, not all causes of harm are covered. Generally, insurance covers accidents that you should have prevented. Liability limits of $300,000 are common and go up from there. You can purchase an umbrella or excess liability policy which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits.
Coverage F - Your policy provides no-fault medical coverage. If a friend or neighbor is injured in your home, he or she can be reimbursed for their medical bills. This way, minor expenses are paid without filing a liability claim. Coverage limits are low, usually in the $5,000-$10,000 range. This does not cover your medical bills.
