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Everything You Need to Know About Homeowners Insurance

We sat down with Brendan Healey of Healey Insurance group to get the lowdown on what homeowners insurance actually is, what it covers, and everything else you need to know before purchasing a home.

In this quick article we talk to Brendan, owner of Healey Insurance Group LLC. He started the agency in 2011 with the vision of providing exceptional customer service, comprehensive coverage and insurance education to all his clients! We’re stoked to learn from him and get the lowdown on what home insurance actually is, what it covers, and everything else you need to know before purchasing a home.

What is homeowners insurance? 


Homeowners insurance is insurance that protects your home and personal belongings from covered losses. The goal of a home insurance policy is to put you back where you were before the loss occurred. Keep in mind if you rent out the property you own, you will need a landlord/fire policy.


Most home policies have six sections:

  • Coverage A- Dwelling- This is meant to cover the main structure of a home you reside in.  This section will also cover attached or built-in garages, attached decks and permanently attached items inside the home.
  • Coverage B- Other structures- Meant to cover detached garages, gazebos, pools, sheds.
  • Coverage C- Personal Property- This covers your personal belongings. The easiest way to think about this is if you picked up the house and shook it, everything that falls out is personal property. When determining how much coverage you need, you’ll need to consider items like furniture, clothes, appliances that are not permanently attached, bikes, golf clubs, skis, surfboards, computers.
  • Coverage D- Additional living Expense- If you have a fire or other covered loss that makes your home uninhabitable this help pay for you live to live elsewhere during the time the repairs are being made.
  • Coverage E- Personal Liability- Dog bites and slip and falls (think icy sidewalks) tend to be the majority of liability claims but did you know your coverage could actually apply in the event of a ski accident, an accidental injury on adult softball field, or even from things like libel and slander from a social media post?
  • Coverage F Medical Payments- Bodily injury coverage that applies to your guests even when the injury occurs through no fault of the homeowner. This generally comes in lower limits of $1k-$10k.

Is insurance regional? What should I think about on a regional side? 


Yes! In California and the Northwest Earthquake is something you’re more likely to want. In Colorado, Texas and Oklahoma hail is likely to be one of your biggest concerns. In the Southeast hurricanes are a major concern.

For earthquake and hurricanes you may even need a separate policy to properly insure you home from those types of losses. In all states flood is something that requires a separate policy. Although your lender may not require flood insurance it’s worth noting that over half of all flood claims occur in areas that are not determined to be a high-risk flood zone

What does homeowners insurance cover?


The types of losses covered by a policy will vary slightly by carrier and by region.   The main structure of your home will generally be insured on an “open perils basis”. This means all possible causes of loss will be covered unless that type of loss is specifically excluded by the policy (think flood and earthquake). For your personal belongings some policies will only cover you for specifically names perils such as fire and water damage and all other causes would be excluded.  When shopping consider the open perils (HO-5) policy vs the named perils (HO-3) policy.

Which area is not protected by most homeowners insurance? 


There are going to be limitations for certain classes of personal property such as jewelry and fine.  It is important to know your policy limits and if items are higher value than what is covered by the policy, they need to be listed as “scheduled personal property” or listed on a “Personal Articles Floater”.   Earthquake and flood are other items not generally covered by a base insurance policy.

What happens if I don’t have homeowners insurance? 


If you have a loan on your home the mortgage company will generally require it. if you don’t have coverage, they will place “forced place insurance” on the home and bill you for it.
That policy generally doesn’t provide coverage for your contents or liability and is generally much more expensive than a standard home policy.  Without home insurance you would stand to lose the value of your home, your belongings and be without temporary housing in the event of something catastrophic like a fire. By not carrying liability insurance somebody could potentially come after assets, and future wages to satisfy a judgement against you for their bodily injury and lost wages

What other types of insurance do I need for my home?

  • Water backup coverage- covers damage from water/sewage backing up through a drain line
  • Service Line coverage- covers your sewer line from the edge of the house out to the street
  • Personal injury- Liability coverage for libel and slander
  • Loss assessment- Important if you are in a condo or townhome with a homeowner’s association. For example if the exterior of the building is damaged and the association doesn’t have enough money to pay the deductible, the association will “assess” each owner their share of the loss.

What are some things to know about tech vs. independent broker solutions?


Online insurers may be able offer the ability to change your policy more quickly or avoid having to be on the phone for any changes. With online insurance you are essentially acting as your own agent so you’ll need to have a good grasp on the important coverages vs just comparing prices. A home policy is technically a legal contract between you and the insurance company and with many being 70 or more pages you may find it beneficial to have an expert in your corner that knows some of the exclusions and details buried in that document.

 

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