As an Independent Trusted Choice Agency, Eagle Insurance searches multiple carriers to find the best rates for the coverages you are looking for. We work with you to identify your insurance needs and use our access to multiple companies to deliver a product you are looking for.
When purchasing homeowner’s insurance, the first thing a homeowner must decide is which type of coverage level they desire. There are three different levels of coverages: Basic, Broad and Special. The difference between these coverages can be confusing and lead to a large or unexpected gap in insurance coverage. Below will explain the differences in Basic, Broad and Special Form coverages. These are the typical coverages which may vary by company.
Basic Coverage: This is the least comprehensive of the three coverage options which only covers named perils. This means if a coverage is not specifically named in the policy, there will be no coverage. For example, if something happens to your home by an event not on the list, you’re not covered. A Basic Form policy tends to be very limited and should be used with care. Typical coverages included in a Basic Form policy are:
- Windstorm or Hail
- Aircraft or Vehicle Collision
- Riot or Civil Commotion
- Sinkhole Collapse
- Volcanic Activity
Broad Coverage: This coverage is bit more expanded than the Basic Form coverage. Just as with the Basic Form policy, a Broad Form policy covers only named perils. Typical coverages included in a Broad Form policy not only include those listed in the Basic Coverage, but also:
- Burglary/Break-in damage
- Falling Objects (like tree limbs)
- Weight of Ice and Snow
- Freezing of Plumbing
- Accidental Water Damage
- Artificially Generated Electricity
Special Form coverage: This type of policy is the most inclusive of the three options. All perils not listed below are covered perils. This type of coverage can be extremely beneficial to you since Special Form coverage coves most hazards one might never expect. However, if something happens to your home, and it is on the list, the policy will provide no coverage. The typical exclusions for a Special Form policy are as follows:
- Ordinance of Law
- Power Failure
- Nuclear Hazard
- Intentional Acts
Now you have chosen which type of coverage you need for your home, next is to figure the amount of coverage needed. This is done by computing the replacement cost of your home via Marshall & Swift/Boeckh computation. With the replacement cost calculated, the following coverages are then determined:
Coverage A: Dwelling – This covers the value of the dwelling itself (not including the land). Typically, a coinsurance clause states that as long as the dwelling is insured to 80-100% (depending on the company) of actual value, losses will be adjusted at replacement cost, up to the policy limits. This is in place to give a buffer against inflation.
Coverage B: Other Structures – This covers other structures around the property, such as a garage or shed, which are not used for business purposes. Typically, this amount is limited to 10% to 20% (depending on the company) of the Coverage A, with additional amounts available by endorsement.
Coverage C: Personal Property – This covers personal property, with limits for the theft and loss of particular classes of items (such as jewelry, guns, money, coins, etc.) which is typically 50–70% of Coverage A, depending on the company. Typically, personal property is covered as actual cash value, which will pay the cost to replace belongings, minus deprecation. Replacement cost for personal property can be purchased for an additional premium, which would replace belongings at current full cost.
Coverage D – Loss of Use/Additional Living Expenses – This coverage is not provided by some companies. If it is provided, this covers expenses associated with additional living expenses (i.e. rental expenses) and fair rental value, if part of the residence was rented, however only the rental income for the actual rent of the space not services provided such as utilities.
The next step is to determine the amount of liability coverage you will want for your home. These coverages are:
Coverage E – Personal Liability – This type of coverage covers damages/payments which the insured is legally liable for because of bodily injury or property damage caused by an occurrence arising out of the insureds premises or personal activities.
Coverage F – Medical Payments – This covers medical expenses incurred by persons, other than the insured, who sustain bodily injury caused by an accident arising out of the insured’s premises or personal activities.
Underground Service Line Coverage - This optional coverage provides coverage for direct physical loss to service lines that are owned by the insured or for which the insured is legally liable to repair. This will include such things as underground pipes, including their valves and equipment and also underground wires; that convey a utility service such as water, sewage, electricity, gas, steam or communications to or from the residence on the described location. The loss must be caused by or result from a mechanical breakdown, artificially generated electric current, wear and tear, freezing, including frost heave and thaw or weight of equipment, animals, or people.
Replacement Value Coverage – This optional endorsement is available for those insured’s who wish to have certain covered property on a replacement value basis. This coverage differs among the various companies.
Backup of Sewer – This optional coverage covers the direct loss to covered property caused by water or matter present in the water that enters the residence through sewers, drains and sump systems may be added.
Refrigerated Foods Coverage – This optional coverage provides for loss or damage to food products contained in a freezer or refrigerated unit on the insured premises.
Equipment Breakdown - Installed Equipment Breakdown is an optional coverage which covers mechanical and electrical breakdown of installed equipment in a dwelling.
Personal Computer Coverage – This optional coverage also varies by company. Typical items covered are Home Computers, personal Laptop Computers, iPhones, Palm Pilots, Blackberries, iPods, GPS (not farm), Cell Phones and Other Electronic Devices.
Scheduled Property Coverage – There is a wide range of optional coverages which are available by the various companies. In addition to those described above, some of the other optional coverages are coins, furs, jewelry, watches, guns and much more!