This is an excerpt from the WorthPointe e-book A Financial Planning Guide for the LGBT Community by Kermit Johns. This resource is provided as a complimentary resource to aid for the community.

Homeowner’s Insurance

A common notion when shopping for insurance is that as long as the coverage limits match, a policy or quote comparison is “apples to apples.” The reality is that homeowners’ policies differ substantially even though they may appear to be identical.

Important questions to ask and consider:

• Is this an all/open peril policy? All/open peril policies list only what’s excluded and serve as the most comprehensive choice when shopping for coverage. Those named peril will do the opposite and only list what’s covered — so if you have a peril that isn’t mentioned, you won’t be covered.
• Does my coverage include replacement cost? As mentioned previously, with replacement cost coverage, you can rest assured that your insurance company will pay what it costs to repair or replace your damaged possessions at today’s prices, without incorporating depreciation.

Your policy will consist of the following coverage:

Dwelling/Physical Structure

Protection for the structure itself minus land value or cost to rebuild home.

Other Structures

Can be an outhouse, shed, garage, greenhouse or any other structure not attached to your dwelling. This coverage may also be used when protecting your fence. Typically, your policy will automatically come with 10% of your dwelling, so if you do have any other structures, ensure you add the right coverage to make sure they’re protected.

Personal Property

If your personal possessions, like furniture, clothing, and appliances, are damaged or deemed a total covered loss, it will be arranged to repair or replace them.

Loss of Use

Will cover any normal or additional living expense incurred while your home is being repaired. For example, your home is damaged from a fire. Your additional living expense would be covered while the repairs occur, i.e., you spend $500 compared to your normal $400 on groceries since you have to dine out. Loss of use covers any additional living expenses, meaning any necessary expense that exceeds what you normally spend, such as hotel or rental home charges, food and utility expenses, and additional car mileage. For example, say you usually spend $400 per month for groceries. While your home is being repaired, you spend $500 a month since you have to dine out instead of cook at home. Your policy will cover the $100 difference. It’s important to keep all additional living expense receipts.

Liability

If someone is accidentally injured or has their own property damaged while on your premises, your carrier will defend any claims against you and pay those claims up to your policy limits. They will also pay for reasonable and necessary medical expenses up to the limit you purchased, regardless of who was at fault.

Medical Payments

Applies to the costs associated with injuries that happen to guests at your home, regardless of who is at fault.

Deductible

Your standard deductible will be used for every other coverage claim aside from wind and hail. While the standard is 1% of your dwelling, certain companies will allow for a less expensive deductible, like $1,000 or $500. This will give you flexibility when filing smaller claims.

Wind/Hail Deductible

Just like your standard deductible, you’ll generally find this deductible to be 1% of you dwelling, but you may certainly ask for a reduction if available.

Other important factors:

• Do you have a pool, treehouse or trampoline? Consider increasing your liability limits.
• Have a coin collection? Expensive computer? Engagement ring? Ask your agent about scheduling high value personal property. Scheduling property will reduce your deductible and ensure your items are completely covered!

About the Contributor: Andrew Chavez

Andrew Chavez focuses on property and casualty insurance, and life insurance. He has served five years in the insurance industry, working as captive agent dedicated to serving his policyholders. His objective is to look at the big picture and anticipate the needs of his clients, ensuring they receive the best possible coverage at the most competitive price. He strives for perfection and above all, customer satisfaction.