How Colorado Insurance insures better than most?
We believe in ensuring our clients properly, and not sacrificing coverage which could put you in a compromising position. Whether it be more extended dwelling coverage on your home policy, to correctly scheduling valuables to making sure we educate you on the importance of adding an umbrella policy. You can rest assured that our agents have the knowledge and experience to insure you better
Does value of your home dictate dwelling coverage?
It plays a factor, but is not the determining one. Your dwelling coverage is mostly dictated on a price per square foot guideline based on the above ground square footage of your home. That could range from $120/sq. ft. if your home is fairly basic in finish to $250/sq. ft. and up if your home is very custom. Something to keep in mind is dwelling coverage does not include your land value because that does not play a factor in having to rebuild your home in the event of a loss. This is where value of your home and dwelling coverage could greatly differ.
What is extended dwelling coverage?
Extended dwelling coverage provides you with an extra contingency fund to rebuild your home the way it was in the event of an entire loss above and beyond your base dwelling coverage (coverage A). A lot of carriers will only offer an extra 20-25% of the dwelling amount for this coverage. At Colorado Insurance, our carriers offer a minimum of 50% available extended dwelling coverage which could mean tens of thousands of dollars in extra coverage for your home. Some of our carriers even offer uncapped dwelling coverage. This is the very best extended dwelling coverage you can get on your home insurance policy. Essentially this will pay to rebuild your home the way it was, any amount above and beyond your base dwelling amount.
Replacement cost vs actual cash value
This is a very important aspect of your home policy, and can end up costing you thousands of dollars if you don’t understand it and is explained properly by your agent. The most common reason this comes up is when/if you need a replacement of your roof due to a covered claim. Let’s take a 20 year old roof for example that costs $15,000 to replace. If you are covered at replacement cost which is what you want, the insurance company is going to replace that 15 year old roof with a new roof, no questions asked minus your deductible. Some carriers are insuring at actual cash value though. Essentially the insurance company is going to depreciate that roof based on the 20 year age and give you an amount for the roof that they see fit, then minus your deductible. This means on that $15,000 roof that is 20 years old, they could choose to give you $3,000 payout for example to replace that new roof. This leaves you, the client, covering the remaining cost.
Meaning of straight deductible vs. percentage deductible
Home deductibles are something to really pay close attention to these days. A $1,000 deductible is really the lowest one that you will find on your home insurance policy when shopping different carriers. Then of course we will see $1,500 and $2,000 deductibles depending on the underwriting guidelines of specific carriers. Now we are seeing percentage deductibles which could be a ½%, 1% or even 2% of the dwelling amount. For example, let’s say you have $500,000 in dwelling coverage (coverage A) on your policy and you have a 1% deductible. That means that you are self-insuring any home claims that may happen for the first $5,000. We are also seeing carriers switch people at their renewal date. You may have previously had a $1,000 home deductible but now have been switched to a ½% or 1% deductible at your renewal, without you really seeing this change.
Recommended liability limits and why
Your home liability is defined as any harm you could do to another person, or any damage you could do to somebody else’s property both and off premise of the home. This is really the only insurance you can get for you and your family to protect your assets from things that could happen out in the world. We always recommend you carry the max liability limit that you can get, which most of the time is $500,000. Then of course we always recommend that you supplement that with an umbrella policy for extra added liability and protection.
Scheduled property and why
Scheduled property is going to be any personal property of significant value that you own. This would include any jewelry, furs, collectables, artwork, firearms etc.. There are 2 reasons why you would schedule these items. The first reason is when you are scheduling them, you are insuring them at a stated amount that both you and insurance company agree upon and this is not subject to a deductible if there were to be a claim. The second reason is it will cover your items for loss or mysterious disappearance both on and off premise of the home, again not subject to a deductible.
Why is renter’s insurance important?
Of course renters insurance is important to cover your personal property. The other main reason why renter’s insurance is imperative to have if you do not own a home is for the liability portion. Again, skipping back to the liability section, this is the only insurance you can buy for you as a person out in the world. For example, if you are renting an apartment and accidentally set that unit on fire which then causes 3 other units around you to burn, who is going to pay for this catastrophic event? Your liability insurance is designed to kick in and pay for this.