Homeowners Insurance Tips - Designing Spaces
We're Designing Spaces, the show that's all about you and your space, your home and surroundings. I'm Debi Marie. Today we continue our smart home, safe home theme. We'll be presenting topics to help you live smarter and keep your family more safe.
We'll conduct a homeowners insurance checkup to see if all the right things are covered. Also, a fire-resistant building product, plus deep cleaning your carpets and upholstery. And we have an interesting project for all you do-it-yourselfers. So stick around and see it all right here on Designing Spaces. Maybe it's time for a homeowners insurance checkup. What's that? Well, it's an update on your homeowners insurance, making sure you have maximum protection. Want to know more? Then take a look. Homeowners across the country value what they have: their homes and what's inside them. Homeowners insurance protects your home and personal property. It also provides liability protection plus more. But over time, things change.
To better understand how homeowners insurance works and what you need to know, Designing Spaces met up with one homeowner and an Allstate agent. Meet Megan, a homeowner, and Allstate insurance agent Tim Waltrip, who will serve as our guide to better understanding homeowners insurance. So can you tell me why an annual homeowners insurance checkup is necessary?
That's a great question, Megan. The first goal of an annual homeowners review is to make sure that you understand and are comfortable with your current coverages, as well as to make sure we have adequate protection for your home, your contents, and the liability exposure you may have. What are a few things that are covered under homeowners insurance? Your homeowners insurance is designed to cover your dwelling, the home that you live in, as well as anything that may be attached to the home.
Say you had a deck or a garage. Another thing that it protects are the contents of that home: your clothes, your furniture, your appliances, your electronics, in the case they may be stolen or damaged. And the final thing that it covers is your liability for your guests. What are a few things that aren't covered under homeowners insurance?
The major things that your homeowners insurance generally doesn't cover is going to be flood insurance, earthquake insurance, identity theft protection, and a personal umbrella policy, or it's often referred to as excess liability. But the great news is, all four of those things can be purchased from your local agent. I've been in my house a really long time; what does that mean for my insurance policy?
Well, unfortunately, for many homeowners, it means your policy is outdated. And so that's another reason you want to do an annual insurance review. Let's say you purchased your home 10 years ago and you spent $200,000 to build it, and today it would cost $300,000 to rebuild it -- that could be a big gap in your coverage.
Other things that can happen from year to year is you may finish a basement, you may rebuild your kitchen. Those two things would increase the coverage amount that you would need on your home. Okay, so then do I need to purchase extended coverage? Extended coverage can be purchased for certain things that may exceed the limits of your normal policy. So an example of that would be an expensive wedding ring or expensive wedding set that is worth maybe $10,000. You may have an individual limit for an individual piece of jewelry of say $2,500. That could be a coverage gap that you would have. Or you may have an expensive set of golf clubs or something like that. Can you tell me what about liability and homeowners insurance?
That's a great question. The liability portion of your homeowners insurance really covers you in the event that you're sued for somebody being injured on your property or if you are responsible for destruction to somebody else's property. What do you say we go to your house, do a walkthrough, and I can illustrate some things that could affect your insurance rates and your coverages?
I think that's a great idea. One of the great things about doing an annual review is to make sure you're getting all the discounts that you qualify for. In fact, I see you have an alarm system here; along with smoke detectors and fire extinguishers, you could qualify for a discount just by having that. Other discounts you may qualify for would be a newer roof discount or you could qualify for a discount if everyone in the home is nonsmoking. You can even qualify for a discount by bringing your auto and other policies and bundling them with Allstate, and you can qualify for a discount for being claim-free. I do have a couple questions about some upgrades in the kitchen.
Oh yeah, that's great. If you have new appliances or finishings, you always want to update that because you may have inadequate coverage. Let's go take a look. Well, we recently had new countertops put in. This is a great example of an improvement that can really be important at the time of loss for a homeowner, and here's why: oftentimes, homes are built with standard grade finishes, and over time you may do a replacement or you may do an upgrade to semi-custom or custom. In that case, you would need to re-estimate the replacement cost of those finishings so you had adequate coverage at the time of loss. So even my bathrooms would have some improvements.
Oh, sure. You're going to want to list all the improvements you do with your agent every year. You know, like upgrades to your fixtures or your sauna. Wow. We did take the sink that was in here and we installed it in the basement, and then we made our basement into a rec room. Congratulations, that's an upgrade, Megan.
Making updates to your home like finishing your basement or your attic or structural improvements to your home can all have implications on your homeowners insurance policy. You're going to want to make sure you bring that to the attention of your agent, and then, for example, on your basement you finished, should you have water backup through the drain or the sump pump give out, you could have water damage down there, and you'd want to have an optional coverage called Water Backup. Actually, I can see right over here you've got your watches and some of your jewelry.
This could very well need to be scheduled. Anything that has a higher value in your home, you're going to want to bring to the attention of your agent. You simply get an appraisal of the watches, and then share that with your agent, and he'll schedule them for you. Oh, great. Good to know. Because we've also got some pens. Oh yeah, that's a cool collection. Yeah, again, just get those appraised, share it with your agent. In fact, that reminds me: what you can do is a 360. It's as simple as just having an iPhone or an iPad, and you just pan the entire room.
If you've got drawers or cabinets, what I suggest my clients do is just open the drawers, pan them real quick, and you can go to Allstate.com or DigitalLocker.com. But the idea is that you simply videotape everything you have in your home and you store it there safely and securely. Why do you want to do that? Because if you lose your entire home, heaven forbid, to a fire, you don't know what you had, and it takes months and months and months to recall all those things.
So you simply pan everything, you can review it with your agent, highlight some things that may need to be scheduled. Fine art, musical equipment, high end sports equipment. But your agent can help you get through all those different pieces. Well, we did recently purchase a new lawnmower, a riding lawnmower, a really nice one. Sure, we can schedule that too. As far as other things go in your yard, updates to landscaping, new trees, say you put in a new hot tub or change out your sprinkler system, these are all things you would discuss with your local agent and find out if your standard policy covers it or if you need to purchase additional coverage. Good to know.
Absolutely, Megan. It's important to have a local agent that you can work with and that understands the details of the coverage for your neighborhood and for your region, an agent that will grow with you and grow with all the changes of both yourself and your family. In addition to doing an annual insurance review, I always suggest that my clients do a little checklist to prevent losses in the first place.
A checklist that you maybe do twice a year. I always suggest you do it with Daylight Savings Time so you don't forget. For additional ideas on how to save money and to make sure you have the best coverage, go to Allstate.com and find an agent near you. Tim, thank you. I have learned a lot, and thank you for spreading the word on homeowners insurance.
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