Wednesday, February 23, 2011

Homeowners Insurance 101

AF Insurance
Jonathan Kobler
(817) 405-2631

Insurance. Let’s face it – it’s not a subject that people like to talk about at parties, unless you are an insurance agent. In fact, for most people, it’s just one of life’s necessary evils. If you are one of those people, my goal today is to let you see another side of the coin. While it’s true that insurance is probably one of the few things in life you purchase with hopes of never having to use it, it does provide some pretty significant benefits if something ever does. At a basic level, homeowners insurance protects the insured against the possible perils, such as fire or tornado for example, that could cause damage to the structure of the home or the personal belongings kept in the home. Most insurance companies provide this coverage through 6 basic components of a homeowners policy:

Part A - Dwelling: This is the amount the insurance company estimates it would take to rebuild your home in the event your home is completely destroyed. This number consists of the building materials used to build the home, both interior and exterior features. In North Texas, you should expect a dwelling amount that is somewhere in the ballpark of $90 - $110 per sq ft. If your home has custom work done, like a custom kitchen or bath, then you might expect your dwelling amount to be higher.

Part B – Separate Structure: This is the amount of insurance a homeowners policy provides for structures that are not attached to the home, such as garages, gazebos, or storage sheds. Generally, separate structures are covered at about 10% of the Dwelling amount.

Part C – Personal Property: This is the amount of insurance a homeowners policy provides for all personal property kept on premises of the home. Which includes but not limited to electronics, clothing, furniture, home décor etc. Expensive items such as jewelry, collectible art, and furs have limited coverage. If the value of these items is higher than the limits provided for in the policy such as wedding or engagement rings, it is highly recommended that you add floaters to ensure that these items are insured to their full value.

Part D – Loss of Use: This pays the additional costs of living away from home if a house is inhabitable due to damage from a fire, storm or other insured disaster. It covers hotel bills, restaurant meals and other extra living expenses incurred while the home is being fixed or rebuilt.

Part E – Medical Payments to Others: In the event that someone is injured in a policyholder’s home, the injured person can simply submit medical bills to the policyholder’s insurance company. In this way expenses are paid without a liability claim being filed. This coverage, however, does not pay the medical bills for the policyholder’s own family or pets.

Part F – Personal Liability: Liability coverage protects against the cost of lawsuits for bodily injury or property damage that policyholders or family members cause to other people. It also pays for damage caused by pets.

Most people would identify their home as their greatest investment. At the same time, most people do not have enough in savings to rebuild, repair or replace their home and belongings in the event of a sudden loss. Homeowners insurance allows you to share costs associated with rebuilding or repairing covered losses with an insurance company. So when you think about it, insurance is something that helps protects your financial assets just as much as the property. Can you imagine if you didn’t have insurance and a tornado leveled your home? What would you do? The mortgage company will still want their money, right? And if you are like me, you probably don’t have $200,000 just sitting around in your bank account. Can you see how that might put you and your family in a bad spot financially?

There is a lot to consider when purchasing an insurance policy, and sadly some people don’t take the time to sit down and really assess their needs. Make sure that you take the time to talk with an agent and choose one that you can really trust. If there’s something I’ve learned in my career as an agent, everyone is happy with their insurance until they have to make a claim. Don’t find out too late that you saved $100 dollars up front, but lost $1,000s on the back end. I’ll leave you with a quote from an unknown person that applies to everything in life, including insurance – “The frustration of poor quality lingers long after the thrill of the lowest price.”

Here’s hoping you never have to make a homeowners insurance claim!

Jonathan Kobler, contributor
AF Insurance Agency representing Farmers Insurance in Dallas Fort Worth
The Grove Team would like to extend a big thank you to Jonathan for contributing to our blog. Jonathan is available to you to assist with this and all of your other insurance needs. Are you or someone you know in need of a real estate team? Contact us direct, (817) 337-0000 or find us online,

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