Valor Insurance Group, A Division of Colorado Insurance, strives to insure you better
We believe in insuring our clients properly, not sacrificing coverage which could put you in a compromising position. Whether it be extended dwelling coverage on your home insurance policy, correctly scheduling valuables, or 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 make the proper coverage recommendations.
Does the value of your home dictate dwelling coverage?
It plays a factor, but doesn't determine reconstruction costs. 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 customized. Something to keep in mind is that dwelling coverage does not include your land value, as that does not play a factor in rebuilding 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 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. Our insurance carriers offer a minimum of 25%, all the way up to 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. The most common reason this comes up is when/if you need a roof replacement due to a covered claim. Let’s take a 20 year old roof that costs $15,000 to replace, for example. 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 minus the deductible, no questions asked. However, some carriers are insuring homes at actual cash value. 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, minus your deductible. This means, on a $15,000 roof that is 20 years old, they could choose a $3,000 payout to replace that new roof. This leaves you, the client, covering the remaining cost.
Straight Deductible vs. Percentage Deductible
Home deductibles require close attention. It can mean a much lower premium now and a lot more out-of-pocket in the long run. A $1,000 deductible is likely the lowest you will find on a home insurance policy. Some carriers will require, $1,500, $2,000 and even $5,000 deductibles, though. Another form is the percentage deductible, 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 1% deductible. That means that you are self-insuring any home claims for the first $5,000.
Personal Liability Coverage
The personal liability portion of your homeowner's policy protects you from paying out-of-pocket for accidents that happen, both at home and away from your property. This coverage provides payments for medical expenses, legal defense, lost wages, pain and suffering, and more. It's always recommended that you carry the max liability limit available, which most of the time is $500,000. An umbrella policy is an inexpensive option to provide a much higher limit of protection, as well.
Scheduling Personal Property
Scheduled property can be any personal property of significant value that you own. This would include any jewelry, furs, collectibles, artwork, firearms etc. There are two reasons to schedule these items. The first being, when scheduled, the items are insured for a stated amount that you and the insurance company agree upon, not subject to a deductible. The second reason is that scheduled coverage will reimburse you completely for items lost or stolen, both on and off the premises of a home.