When summer comes, most people look forward to going on vacation or simply enjoying the fine weather. Thinking about homeowners insurance is not high on their list of priorities. But summer is the time when people often travel and leave their homes unattended, exposing themselves to risk. Having the right insurance coverage can keep summertime a relaxing time, and save you hundreds or even thousands of dollars should the unexpected occur.
Here are some real-life scenarios that describe the impacts of having the right — and the wrong — kind of insurance coverage. Each example is based upon typical homeowners or renters coverage.
Please choose the right insurance coverage for each scenario. There should be one answer for each scenario.
A young couple leaves their apartment to spend a warm summer day at their apartment complex's pool. In their enthusiasm, they forget to lock the front door. They return a few hours later, shocked to find their television, stereo, and some cash missing. The cost to replace the stolen property is $2,500.
Mr. & Mrs. Smith, who are staying at a lovely coastal resort, leave their hotel room to spend a day at the beach. When they return to their hotel room later that day, they discover that the diamond anniversary bracelet Mr. Smith had given to his wife is gone.
Mr. Smith calls their insurance company to report the theft. He is relieved to learn that the loss is covered. However, the Smith's policy contains certain liability limits for jewelry. To cover the full replacement cost of the bracelet ($5000) Mr. Smith should have purchased a scheduled Personal Property Endorsement to increase the liability limit on jewelry before the theft.
The cost to replace the bracelet is $5,000.
Shortly after Mr. & Mrs. Wilson purchase a new home in the Gulf Coast area of Florida, a hurricane destroys the residence. An insurance adjuster visits their home and determines that the house will cost $150,000 to rebuild. In addition, it is determined that $100,000 of personal property is lost.
The Wilsons ask when they can start rebuilding their home and replacing their personal property. The adjuster informs them that their insurance policy valued the replacement cost of their home at $125,000, and their contents at $75,000. If the Wilsons had received a proper valuation on their home and contents, the losses would have been covered in full.
Mr. Peterson is reading in his den when he notices that the heavy summer rain has turned to hail. The next day he finds hail damage to his roof and calls his insurance company. The insurance adjuster arrives and determines that the composition shingle roof must be completely replaced for a total cost of $8,000. The adjuster applies the depreciation for the roof's age (ten years), which reduces coverage by 25% to $6,000. If Mr. Peterson had purchased a replacement cost endorsement to his homeowners policy, the roof would have been completely covered.
The Decker family is hosting a large family pool party on the Fourth of July. Tragedy strikes when Thomas, their twelve-year-old nephew, falls off the diving board. Seriously injured, the young boy is taken to the hospital. The hospital bills totals $3,000, but Thomas' parents have no health insurance.
Fortunately, the Deckers realize that the medical payments portion of their homeowners policy covers medical bills of individuals injured on their property, regardless of fault. Thomas recovers quickly, everyone breathes a huge sigh of relief, and Thomas' family is saved from a large medical bill.
The Bodden children are playing in their backyard when one of them throws a ball over the fence into the Pagano's yard. One of the Bodden children climbs over the fence and unknowingly steps on Cosmo, the Pagano's dog. The startled dog snaps and bites the child.
Outraged, the Boddens file suit against the Paganos and win their case. Fortunately, the Paganos have medical and liability insurance provided by their homeowners policy to protect them.
Insurance can be a complex product to buy — but it doesn't have to be. Knowing your risks and understanding your coverage is the key to purchasing the right homeowners policy for you. Coverages between policies often vary, so buying on price alone may not provide you with all the insurance you need. Make sure that you understand exactly how protected you are before you buy. Talk to one of our Insurance Specialists and find out more about homeowner, apartment and condominium insurance rates form Homesite.