Frequently asked questions about your home policy

Why is the dwelling amount so high? I am covered if my basement floods? Why are my rates as much as they are?

If you read our last blog post on what makes up an auto policy, then you already know that insurance is a nuanced and complex industry. You don’t need to know all the ins-and-outs, but it never hurts to have more information about why your policy is the way that it is.

Since we’ve already discussed a common auto policy, we wanted to compile some frequently asked questions about common homeowners policies. This includes insurance on your home, condo, or apartment unit (renters insurance).

Frequently Asked Questions

• Why is my home rate so high?

Years ago, someone with a $100,000 home paid the same premium as anyone else who had a $100,000 home.  Now, however, home insurance pricing is much more sophisticated.  Companies have found that claims data is more impacted by the people living in the home than the home itself.  For example, someone with good credit history will make improvements when they’re needed, not just try to limp something along (like an old furnace or roof).  Other factors can impact the rate, as well.  A 50 year old married homeowner will pay less in premium than a 22 year old who just bought his or her first home.   Finally, combining your auto insurance with your home insurance will save you money.  The home might have a claim or two, but the auto insurance portion might be claim free, giving the insurance company the profit they desire.

• Why is my home insured for more than it is worth?

Most homes are insured for the cost of rebuilding an identical structure, NOT the market value of the home.  After a total loss, most people want to rebuild their home just like it was before the claim.  If you have beautiful oak flooring, you probably want beautiful oak flooring — not plywood and carpeting. If you had 3 bathrooms, you probably want 3 bathrooms. Typically, the cost to replace a home just as it was before the loss is higher than the home would be sold for.

• What if I have a second home?

A 2^nd home, like a vacation property or a condo in the city, is insured the same way as a primary home. Coverage is needed for the dwelling and maybe some personal property, as well as liability coverage.

• How much jewelry does my home policy cover in case of theft?

Most home insurance policies cover $1,500. Some carriers will raise that limit, but usually not by very much.

• Should I schedule my jewelry?

When you schedule a jewelry item, you will receive All Risk coverage, which includes mysterious disappearance and breakage, the two most commons types of jewelry loss. In addition, you will usually pay no deductible.

• Where does the water need to originate from to be covered under Water Backup and Sump Pump Failure coverage?

Ground water that seeps through a window well, a crack in the foundation, or that comes through the front door will never be covered by this endorsement. These claims would only be covered with Flood Insurance. The Water Backup and Sump Pump Failure endorsement will only pay when water enters a home through the sewer system or due to failure of the sump pump. For example, a lightning storm knocks out the electricity, the sump pump doesn’t work and the basement floods. This would be a covered claim if someone maintains this endorsement.

• My condo premium seems low. Am I missing something?

Unlike a typical dwelling, where you have to insure the outer walls and the roof, with a condo policy you can insure the building for a value much less than the property’s value. You are only responsible for your personal property and the drywall in. Customers are usually surprised that the premiums are so affordable, and they have to be reminded that so much of what makes up a condo’s value is its urban setting as well as the outer walls that are owned by the association.

• Can I save money on my condo policy?

Just like a normal homeowners policy, you can save money by combining your auto and condo policies. The age of the condo will make a difference in the premium, so the newer the building the cheaper the rate. A unit in a brick building can have a smaller premium as well. Otherwise, the less personal property you need to insure, the cheaper the rate will be.

• For a renters policy, is my personal property only covered in my unit?

A typical renters policy covers 10% of your personal property limit for off-premises losses. For example, if you are insured for $30,000 worth of personal property, if your purse or computer is stolen from your car, you would be covered for $3,000. This same rule applies to items kept in a storage unit. 

• I have a roommate(s). Is their personal property covered under my policy?

Most renters policies do not extend coverage beyond those listed on the policy (AKA the named insured). If you’re not married, most companies will not allow you to list anyone else on your renters policy, even if it is a boyfriend or a girlfriend that you live with. They should get their own policy.

Eckburg Insurance Group is the largest home and auto insurance provider in northern Illinois. We can cover all your home, auto, business, and life insurance needs. Our dedicated staff, made up almost entirely of men and women who were raised in our community, works tirelessly every day to keep you protected. Call us today at (815) 877-4100 or click here for a quote!