There are several surprises about homeowners’ insurance you probably didn’t know. One is that, in most states, insurance brokers aren’t legally liable for failing to properly inform you of policies best fitting your needs. As you continue reading, you will learn about other similar surprises and discover how to find coverage best suiting your requirements.
Many coverage subcategories, also known as “divided coverages,” are included under the “Homeowners’ Insurance” umbrella. Dwelling coverage covers your house, “Other Structures” protection covers structures, like garages, sheds and pool houses, separated from your house. Personal property protection covers items inside your home, like furniture and artworks. “Loss of Use” protection provides for alternate accommodations when your house can’t be lived in. Personal liability protection pays for legal issues related to injuries caused by the owner or by hazards on his/her property, while Medical Payments coverage pays medical bills for injuries suffered by others on the homeowner’s property. The homeowner’s policy’s declaration page details the coverage limit for each subcategory, per occurrence. What injuries are included in a given occurrence is a legal matter, determined by the courts.
Deductibles, amounts homeowners have to pay for covered losses before their insurance pays, are found on their policy’s declaration page and are usually fixed amounts, like $2,000. However, these figures can depend on the hazard classification of issues causing the damage in question and their amounts could be a percentage of the damage incurred. This can sometimes cost homeowners dearly as those in New York discovered in 2012, when Governor Cuomo classified Sandy as a “superstorm” instead of as a “hurricane”.
The “Special Limits of Liability” section sets the reimbursement limits for each category of personal property. It offers one of two types of reimbursement for lost or stolen items: Replacement Cost; and Actual Cash Value. Replacement Cost pays you the item’s replacement cost today, brand new, ignoring depreciation, while Actual Cash Value reimburses you for the item’s current “as-is,” depreciated value.
Homeowners’ insurance could cover personal property damaged while it’s away from your house. It might also cover damage caused by the insured, his/her workers, or household members while away from the residence.
In New York State, by law, insurance companies are required to include a Homeowners Workers’ Compensation Insurance addendum to their homeowners’ policies. According to the NY State Workers’ Compensation Board, this only covers “contractors…deemed employees under the WCL and working a total of less than 40 hours a week in or around a one, two, three or four family owner occupied residence.”
In general, you need a specific rental endorsement prior to renting out your property. Otherwise, you’ll likely nullify your policy. Two possible rental endorsements are: “Additional Residence Rented to Others” (if renting out your entire house); and “Residence Rental Theft” (if only occasionally renting out your house).