What is the value of your home’s contents that are covered by insurance? Is a flood covered? If someone is hurt while visiting, will your insurance pay medical expenses?
Whether you are a renter or a homeowner, our staff members at the Kansas Insurance Department suggest an annual review of your homeowners insurance policy. This lets you brush up on what is covered and evaluate whether the coverage is still adequate (or too much) for your current situation.
When you (and your agent) review your homeowners policy, be sure to find the answers to these three questions:
What does my homeowners or renters policy cover?
A homeowners insurance policy covers the structure, belongings and legal obligations if someone is injured at your home. A renters policy does not insure the structure, but otherwise provides similar coverage.
Check the type of replacement value provided in the policy. Actual cash value (ACV) is the amount it would take to repair damage to a home or to replace its contents, after allowing for depreciation. Replacement cost is the amount it would take to rebuild or replace a home and its contents with similar quality materials or goods, without deducting for depreciation.
Liability insurance protects you from legal obligations arising from accidents involving visiting non-residents. With a few exceptions, such as auto or boating accidents, all-purpose liability coverage follows wherever you go. An umbrella policy can extend the liability limits of a homeowners or renters policy if the policy limit is insufficient.
Homeowners and renters policies typically include limited medical expense payments for injuries occurring on your premises to visiting non-residents.
How much coverage do I need?
Making a home inventory is the best way to determine the appropriate level of coverage needed for contents. An inventory is also a useful tool to have in case of a loss. When compiling the inventory, make sure to include as much detail as possible about the items.
Homeowners do not need to insure the value of the land a home sits on, but coverage should include any outdoor structures on the property.
What are my deductibles and discounts?
Deductibles and discounts are generally the easiest places to save money. Most companies offer discounts for people who have more than one type of insurance policy with them, and for people who have had few claims or are long-term customers.
When it comes to the deductible — which is the amount you have to pay if there is a loss — usually the higher it is, the lower the premium. It’s normal to consider raising a deductible to save on premium, but remember, your share of the bill will be that much more following a claim.
After reviewing the policy, also ask these questions:
Are there any losses — like flood or earthquake — I need to worry about that are not covered in my current policy? Neither flood nor earthquake is covered by a standard homeowners or renters policy. There are optional insurance policies for both disasters.
Has anything changed in my coverage in the last year? When talking with an agent, ask if there are any anticipated changes when the policy renews.
For more general information about homeowners or renters insurance and the basic coverages in a policy, go to www.ksinsurance.org and read or download the publication “Homeowners and Renters Insurance.” You can download our Personal Inventory publication there, too.
For specific questions about coverages or about an insurance company or agent, use the KID online chat feature on the home page of our website, or call the KID Consumer Assistance Hotline in Kansas at (800) 432-2484.
Ken Selzer is commissioner of insurance for the state of Kansas.