When it comes to home insurance there are many questions I get from insured’s, mostly what is and isn’t covered. This entry will discuss many topics on home insurance in NC but I will always recommend you call your agent if you have questions or check your policy for exact verbiage.
Options
There are many home insurance carriers, agents, etc in the NC market so how do you choose which is right for you? There is no easy answer to this question as every insured is different. What I will say is price should not always be the deciding factor in the company or agent you use. The two most common ALL RISK home insurance options you will find in NC are the HO-3 and the HE-7. Since I personally offer the HO-3 I will be discussing this form only in this blog.
What will happen when I call an agent or company for a quote?
- The agent/company will run a residential cost estimator to determine the rebuild cost of the structure. Remember, the land has no insurable value so there are times when the real estate cost is higher than the rebuild cost of the home due to the land value being included in that real estate cost.
- They will begin the quote which typically includes running a credit loss history report. Rates can be dictated by how good/poor your credit (FAIR ISAACS Insurance Score by Transunion) is and whether or not you have multiple claims on your record.
- Price and offering will be provided with the option to purchase.
Seems pretty simple right?! Well the quoting process is, but the part with the most questions is what I will discuss next, coverage.
Coverage
Biggest question I hear, WHAT IS COVERED?! Simply put, EVERYTHING is covered unless it’s directly excluded in the policy paperwork so a better question is, WHAT ISN’T COVERED? (See below)
The Big 3
- Flood
- Earthquake
- Acts of terrorism or war
Note: there are many limitations and exclusions in the HO-3 and HE-7, the 3 noted above are just a sample, for a list of all exclusions see your policy contract or call your agent.
I could list the things that are covered all day including but not limited to: water damage, wind, hail, fire, theft, vandalism, etc. but I find it easier to discuss what is not covered with my insured’s.
Limitations
Just like with exclusions there are limitations. I have noted the most common that affect my insured’s, remember check your policy for all exclusions.
- Jewelry, Watches, and Furs – $1500
- Silverware, Gold, Pewter – 25% of coverage C (personal property) up to $10,000
- Firearms – 10% of coverage C (personal property) up to $10,000, $2500 away from premises
All of these limits also require the claim to happen within the home unless otherwise noted above. If the claim happens outside the home there is no coverage. What is one to do if they have nice pieces of jewelry they need coverage for when they leave the house? You can endorse those pieces of jewelry for coverage anywhere in the world, and I advise you do so as the premium cost is minimal and the coverage is excellent.
Deductible
What deductible should I choose? I recommend $1000 as it tends to be the threshold for which most people would be willing to fix a problem without filing a claim. In other words, you would shell out $1000 but you wouldn’t want to have to shell out much more than that. This deductible also seems to be the sweet spot for premium savings/cost.
If you file a claim the deductible is the amount of money you must pay before the insurance contract kicks in.
Endorsements
The most popular endorsements we sell are listed below, check with your agent for all endorsement options available.
- 125% replacement cost on dwelling – in short explanation this provides a buffer in case we estimated your rebuild cost wrong.
- Personal property replacement cost – we will pay full replacement cost on your belongings in the event of a loss
- Water back up and sump overflow – if you have a “backup” from the street connection or your well and septic system you are covered up to the limit chosen. Limits range from $5000-$25000 and each carry a $250 deductible
- Refrigerated Property Coverage – (I never recommend this unless you consistently carry well over $100 worth of groceries in your fridge/freezer at any given time) this coverage pays up to $500 with a $100 deductible in the event of a covered power loss
- Jewelry – gives endorsed items all risk coverage anywhere in the world typically with a $0 deductible, although a deductible can apply depending on what you choose
ALL OF THIS ABOVE SEEMS LIKE A LOT, BUT HONESTLY ITS NOT THAT BAD. FIND AN AGENT YOU TRUST AND HAVE THEM EXPLAIN EVERYTHING TO YOU IN DETAIL OR COMMENT BELOW AND I WILL ANSWER YOUR INDIVIDUAL QUESTIONS!
Thanks,
The Insurance Man
Charlotte Insurance Man 