Learn More About How Your Individual Risks Can Impact the Type of Policies You Can Get
Just about everyone needs home and auto insurance, but does your policy cover everything you need it to cover? Auto insurance is required by 47 states, and the majority of mortgage companies require you to have a home insurance policy. But not everyone can fit into a “one size fits all” insurance policy.
The “right” home and auto insurance is subjective — finding the right insurance isn’t about matching your needs to a policy, it’s about matching a policy to your needs. When it comes to insurance, your risks are the key point in how your policy should be structured. If you’re not covered for everything you need, you’re likely not going to find out until you actually have to use your insurance — which counteracts what your insurance policy is for.
So, how do you find the right home and auto insurance for you? Talking to the right insurance agent is the first step, but in the meantime, let’s dig into what aspects go into a strong home and auto insurance policy.
How to Build Your Ideal Home Insurance Policy
Everyone’s homeowners' insurance is going to cover the major risks — theft, accidents, and disasters — but where your policy becomes more customized is how your individual risks fit into the coverage that a carrier offers.
For example, if you live in an area that’s prone to tornadoes or hurricanes, you’ll want to make sure you’re covered for this type of event. If something like this doesn’t come to mind, take a look at what’s surrounding your property. If you have trees in your yard, these could also pose a risk if they were to fall on your home and cause damage.
At a base level, your homeowners insurance will cover the following:
- The structure of your home – Let’s say your home was destroyed by a fire, hurricane, hail, or lightning. This portion of your coverage will ensure that you are backed financially in order to make any repairs or rebuild your home
- Your belongings – Home insurance will also cover the items that you keep in your home. Say your computer was ruined in a natural disaster, or it was stolen. Your insurance will cover the cost to replace it. This is often where policies fall short because a policy does not offer enough coverage to replace all of the important items in your home
- Injuries on your property – if you, your family, or even a pet, cause bodily injury to someone on your property that results in a lawsuit, your homeowners insurance will cover the costs of any court defense or court awards
It’s important to note that the three points above don’t offer infinite coverage. Where a policy can be customized to offer additional coverage, it can also be amended to offer more or less financial coverage.
What Else Should Be Included in Homeowners Insurance?
Most carriers will offer more than one type of homeowners policy. Some options will offer more coverage than normal so you can create as extensive a policy as you want. Here are other factors you can look to add to a policy:
- Guaranteed replacement cost coverage – if you’re worried that you could lose your entire home, for example, if it could be destroyed entirely by a tornado, this coverage will cover the cost of rebuilding your home in full in the same location
- Replacement cost coverage – this coverage will ensure that you’re able to replace any and all belongings that are lost with no deduction for depreciation
- Cash out settlement – if you don’t want to rebuild or repair your home in the same location, this option allows you to receive the cost to do so in full so you can complete the work in the location you want
- Waiver of deductible – you can add this option to your policy to have a deductible waived for a covered loss that exceeds $50,000, for example
- First claim forgiveness – some insurance carriers understand that disasters happen to everyone, and you can add this option to avoid having your rates go up when you file your first claim
- Additional living expenses – if you have to stay somewhere else while your home is being repaired, this coverage will cover the cost of your standard of living until you’re back to normal
- Equipment breakdown – if one of your home appliances or systems breaks down, like your fridge or your home security system, this coverage will cover the repair and/or replacement costs
- Tree removal and replacement – if tree debris, or an entire tree, falls on your home or property, this coverage will cover the cost to remove it and replace the tree — even if it didn’t cause any damage
- Utility line protection – for your underground utility lines, like gas, water, and sewer lines, electrical power lines, or Internet and TV cables, this option will cover any repairs or replacements done on your property
- Water backup – if water backs up through your drain, the sewer, or overflows from the sump pump, this coverage will protect you from any damage that occurs
With these additional options for home insurance, you can ensure that you have the total coverage you need to have peace of mind — no matter what comes your way.
How to Build Your Ideal Auto Insurance Policy
Now let’s take a look at auto insurance. In Ohio, auto insurance is required in order to legally drive a vehicle, so you’re going to have this coverage no matter what. Like homeowners insurance, the difference lies in your policy’s ability to protect you when you really need it. Since you probably won’t think about the coverage you have until you’re dealing with a fender bender or a serious accident, it’s good to make sure that you have the comprehensive coverage you need from the start.
A typical auto insurance policy will cover the following:
- Injuries you cause to someone else – If you’re in an accident and you cause injury to someone else, bodily injury liability will cover the costs that you owe
- Injuries to those in your car – if you and/or someone else in your car is injured in an accident, personal injury protection will cover the costs involved
- Accidents – when your car is damaged in a collision, your policy will include coverage to repair any damages
- Damage to property – if in that collision you also damage property like a telephone pole, guardrail, or fence, this part of your policy will cover the costs you are liable for
- Comprehensive – if your car is stolen or damaged by something other than a collision, this part of your policy will cover the costs incurred toward repairing it
- Uninsured drivers – if you’re hit by a driver who doesn’t have insurance or enough coverage to cover your bills, this part of your policy will step in to help
Just like with your homeowners insurance policy, these factors within your coverage won’t always cover everything. Your policy will come with limits to how much coverage you can receive, but these numbers can (and should) be adjusted to fit the amount of risk you face as a driver. This doesn’t necessarily mean you’re a bad driver either. Whether you live in the city or a rural area, where you park your car, and the type of car you have will also come into play when determining your coverage.
What Else Should Be Included in Auto Insurance?
When it comes to your safety while you’re driving, the typical coverage isn’t always enough. Here are options you can look for in a policy to ensure that you have the best coverage possible.
- Short-term replacement cost loss settlement – you can use this coverage for comprehensive and collision losses for up to a year
- Lock replacement coverage – if your car keys are lost or stolen, this coverage can be used to cover the replacement cost
You can also include options in your policy that will cover you in the event that you suffer financial losses from the following:
- Having your vehicle towed
- Having to rent a car while yours is being repaired after an accident
- Getting in an accident in a rental car
- Renting a car when you’re out of the country
- Finding out your car is worth less than what you owe when you go to turn it in at the end of a lease because of an accident
- Getting in an accident or having your car break down while you’re away on a trip
- Any changes you have to make to your vehicle if you or someone you know is disabled after an accident
- Locking yourself out of your car
- Coverage for charges due to an ambulance ride, fire rescue, or police after an accident
There are also options available that you can add on to ensure you’re able to fully take care of any repairs to your car. This coverage could include the following:
- Replacing original manufacturer parts
- Deductible waiver for glass losses
- Repairs due to your car being struck while it is parked and you’re not in it
- Any electronic equipment that you’ve added to the car after purchasing
- Personal items that are damaged or lost in your vehicle due to an accident or disaster
- Pet injury or death
- Child safety seats
You could also add additional benefits to your policy, if they’re available, like roadside assistance, or having your medical coverage doubled if you’re injured while wearing a seat belt.
If you already have home and auto insurance, it can be tough to justify switching your policies. But are you sure that you have all the coverage you need? And if you don’t have either of these policies yet, or you only have one, now is the time to ensure you’re getting the best protection. Talking to an independent insurance agent, like the ones at Hill & Hamilton, is the best way to understand all your options. Independent agents aren’t tied to just one carrier, so they can show you a variety of policies that meet your needs.
At Hill & Hamilton, we care about people, not policies. We’re here to help you understand your policy, while also taking the time to understand your risks so that you get the comprehensive coverage you deserve. Don’t wait until you actually need your insurance to get better coverage. Reach out to our team today to start a conversation about how you can get the right home and auto insurance policy for you and your family.