Homeowners Inruance

Keep Your She Shed Protected

“Other structures” on your homeowner’s insurance policy often refer to attached and detached structures such as garages, carports, tool sheds, and barns. When it comes to other structures on your property, coverage on your homeowner’s policy will vary from carrier to carrier.  If you have multiple structures – either attached or detached to your home – on your property, it is worth investigating to find out what is covered and what isn’t under your homeowner’s policy should a claim arise.

Attached Structures

Garages | Carports | Porches | Pool Enclosures

Not all policies treat these structures as part of your house and may exclude or limit coverage to actual cash value only (depreciated cost), or may only cover certain components instead of the entire structure.

Quality homeowner insurers cover most types of attached structures at full replacement cost, including full pool enclosures or cages (both frames and screens). If the damage is caused by a covered peril (anything that your home would be covered against), the attached structures are generally covered as well.

Detached Structures

Barns | Boathouses | Detached Garages | Tool Sheds | She Sheds

Quality homeowner insurers consider these to be buildings and insure at full replacement cost, meaning the amount required to cover the materials and labor to rebuild the structure to similar parameters. Personal property kept inside these structures are typically covered to the same extent as personal property kept in the main house.

Fences | Docks | Gazebos

These are not considered buildings and are covered at actual cash value, meaning the current market value which is depreciated based on age and condition. Coverage for personal property outside of a fully enclosed building will vary, depending on the cause of loss.

Ask your agent what your policy covers when it comes to other structures and help ensure you have the best coverage available for all structures and personal items located on your property.


ABOUT THE AUTHOR

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Katie Dierks is a Certified Personal Risk Manager who specializes in liability protection for successful individuals.  She takes a holistic approach in designing an insurance program that mitigates the potential threats to her client’s assets and lifestyles. | Connect on LinkedIn

Your Home’s Replacement Cost vs. its Market Value

Your home is one of your biggest assets. Therefore, it’s imperative to make sure you are protecting it with the proper amount of coverage in the event you find yourself forced to rebuild from the ground up because of a catastrophic event. 

Selecting the amount of dwelling coverage can be tricky. There are many different approaches to valuing a property, depending on your focus. Two common valuation methods are market value and replacement cost. A big misconception is that a house should be insured for the value it was purchased for. Market value is simply an agreement between a buyer and a seller for what a property is worth. It is typically the amount the market demands based on the location, schools, local crime statistics, and availability of similar homes in the same area. The value of the land is also factored into the market value.

Replacement cost, on the other hand, ensures that in the event of a loss, your home will be rebuilt using modern materials, current methods of construction and installation, and today’s pricing for labor. The land value is not a factor when determining replacement cost. As an example, a home purchased 30 years ago for $200,000 may cost $300,000 to rebuild today given the rising price of construction materials and labor. While it may be attractive to insure an older home for the market value, it could be a huge financial burden during the rebuild process. The cost for rebuilding or restoring hardwood floors, ornate woodwork, masonry, and plastering to their original condition may be much higher than the home’s purchase price. Conversely, a home situated on a 5-acre lot near the water might sell for $500,000 due to the location and lot size but the replacement cost of the house house itself may only be $200,000. In this case, insuring the home for market value is most certainly setting you up for disappointment in the event of a claim, not to mention the unnecessary premium dollars spent!

Due to the ever-changing nature of the construction industry, it’s important to review your homeowner policy at every renewal to make sure your home is valued properly. If you have done upgrades or added additional living space, your insurance company needs to know so your coverage can be adjusted accordingly.

Our team at Bouchard can help. We have tools to help calculate replacement cost based on your home characteristics. Whatever you decide, understand there is a clear difference between replacement cost and market value. It’s similar to comparing apples and oranges.


ABOUT THE AUTHOR

DeeDee Simpkins is a Personal Lines Account Manager at Bouchard Insurance. DeeDee is experienced in all lines of personal insurance.

Common Home Insurance Mistakes That May Be Costing You Money

Buying a house is not only one of the biggest purchases you’ll make in life but also one of your largest assets. A home requires protection and the most common form of protection is your home insurance. If you’re not careful, you might make one of these costly mistakes when protecting your home.

Being captivated by the lowest price

Have you ever heard the saying, “it’s too good to be true?” Well, in the case of home insurance, many home owners can get stuck on getting the lowest price. However, what they don’t see is the coverages and/or quality may be taking a big hit to get you there. This can cost you BIG if there is a home claim!

Using multiple insurance agents for your insurance

It’s better when they’re together. In addition to having one point of contact, your agency will be better equipped to review your entire portfolio “holistically”, identify gaps in coverage, and make more personalized recommendations.

Not keeping your home insurance agent in the loop

If you’ve added a bathroom, screened in your pool, or gave your kitchen a facelift, you need to ensure your insurance agent is aware!  Not doing so could jeopardize the settlement amount in the event of a claim.

Not understanding the restrictions on your policy

I’m sure the first thing you do when your home policy comes up for renewal is sit down and read through it, right? Not everyone has time to do that, but not being aware of the restrictions or exclusions on your policy can be a costly mistake.

Keeping your deductible too high or too low

Determine your out of pocket threshold and select your deductibles accordingly.   Deductibles are not one size fits all. Too low of a deductible could result in paying unnecessarily high premiums. Too high of a deductible could put you in an uncomfortable position if you do have to file a claim.

Not getting an updated Wind Mitigation

Missing out on getting a Wind Mitigation may be one of the costlier mistakes. Wind Mitigations are what allow us to add credits to your home policy for your roof and other items. When you get a new roof, always think about getting a new Wind Mitigation so you receive the credits you’ve earned!

Ignoring flood insurance

Many people feel that if they don’t live in a high-risk flood zone, they don’t need flood insurance. But according to the Insurance Information Institute, 25% of flood claims come from people in low-risk or “no” flood insurance areas. It can be a costly mistake to not evaluate your flood risk.

As always, the team at Bouchard is here to help you with any questions you may have about insurance. Be sure to speak with your agent to make sure you’re getting the most out of not only your homeowners insurance, but all of your insurance.


ABOUT THE AUTHOR

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Christin Snow is a Personal Lines Account Manager at Bouchard Insurance. Christin is experienced in all lines of personal insurance. | Connect on LinkedIn