Special Limits in a Homeowners Policy

Everyone in this world has things that they collect or hold truly dear to themselves.  What if I was to tell you that your wedding set you wear everyday may not be covered?  What if I was to tell you that your collection of hunting rifles and shotguns may not be protected.  Finally, what if I was to tell you that the fine that you saved up for may not be replaced in full?  These are all questions that are going to be talked about in this blog.  We all know that these products along with furs, silver ware, and many other products along the same line are what people have spent the most on and burglars are wanting to steal.  Being a trained insurance consultant with Farmers Insurance will discuss the three ways to cover these items, how to cover them and why.

The first way is to extend the special limits listed in the policy.  Every homeowner policy has special limits that they will cover each category of items.  If you have a lot items from a certain category it would be easy just to expand this coverage to cover all the products.  There is a catch that you will taking if you the cheapest way out though.  For instance if the category is jewelry there will only be a certain aggregate limit that will take effect.  With Farmers before you expand this limit you will be covered to $1000 per item to a total of $5000.  After the limit is expanded you will be covered for $2500 per item to a total of $12,500.  That would only cover you in the case of theft and you would be subject to a deductible that is listed to the entire policy.  This would be best if you had a bunch of small items that you would only want to replace if they were stolen.

The next way is to place a special coverage on them within the homeowners that we call an unscheduled floater.  This coverage is best if you have several items of a category over $1000 per item.  With this coverage we would be able to replace the items in a loss of any peril (fire, theft, wind etc.) except mysterious disappearance.  The regular limits for Farmers is the same as jewelry, $1000 per item to a total of $5000 per aggregate.  With this coverage we would be able to extend the coverage to $2500 per item to a total of the lesser 60% of personal property or $75,000.  This would be a perfect for the person who has many hunting guns.  They would be able to cover the total amount with a deductible of whatever is less, the homeowners deductible or $500.  This coverage gives you a blanket over the category for a lower deductible allowing you to carry higher deductibles on the home itself.

The final way to protect the special categories is to place a coverage we call a scheduled floater.  This is the most customized coverage that Farmers has to offer.  This coverage would be best for you if you have any of the items over $2500 in the special categories.  The most common is a woman's wedding set.  For example the wedding set is worth $5000 we would place this coverage on rings with the client setting their own deductible.  In essence it is a policy within a policy.  This coverage would cover the rings in any loss that could happen including mysterious disappearance.  For instance if you have this coverage and the woman of the house goes out on the town and losses the ring it would be covered for the deductible that you determine.  The deductible could be even $0.00.  All you would need to do is get this coverage in place with a receipt or an appraisal.  Even better yet you could get this coverage for an agreed amount so that even if a cheaper replacement could be found you would be covered for the amount that was agreed upon.  This by far is the best coverage for special items.  The only restrictions are that the item cannot be worth less than $1500.

There are many ways to protect your belongings.  The first step is to just know what you are currently covered for followed by what do you need to have covered.  These are great questions for an insurance consultant such as myself.  Our first and foremost goal is to make sure that you are covered properly from all the things that can happen in this world.  As Professor Burke would say,"Get smarter
about your insurance."  

Why do you need insurance?

What is more important? Knowing they are protected or a few dollars?

The question that comes to every person's mind at one time or another is, "Why do I even need insurance?"  It seems like necessary evil.  What many people do not realize is of the benefits that will receive if they have proper coverage.  It is important that you have an agent, like myself, who strives to make sure you understand what your money is really going to.  This blog will talk about just a few of the benefits you receive from three of our main policies which are auto, homeowners and most importantly life insurance.

Auto insurance is all about price and that is most important benefit right?  WRONG!!!  Let's take a look at what is at stake with an example.  You are driving down the road when you start to hydroplane and hit another car.  That other car's driver is severely injured when the car rolls several times.  He has several broken bones, a concussion and is unable to work for many, many months because of his injuries.  You are responsible for his car, his medical bills, and his lost income.  Do you think your auto insurance will properly cover you in this situation?  If not, what will happen?  If you cannot cover all the expenses you will be taken to court for the rest of the damages where you would be responsible for legal representation.  Then if found guilty, which you will be in most cases, you will have a massive bill on top of what you owe your lawyer.  Can't pay it?  Guess that means they will start to liquidate your belongs, then your savings and financial plans, then finally if need they will take up to 25% of your earnings through garnishment.  Sounds like fun right?  This all could be avoided through proper placement of the appropriate coverage by a licensed insurance consultant.

You have to have homeowners insurance just to protect your mortgage right?  Wrong!!!  It most cases you home is your largest investment.  That is your castle which means you are responsible for everything in, on and around it.  If you are spending $100,000 plus over the next 30 years don't you want to make sure you are protected.  If someone gets hurt on your land they have every right to sue you.  It could be your neighbor walking up your drive when it is slick out or even a dog bite.  There has even been instances where a burglar sued the homeowner because they were hurt on the property.  Same things are at risk as an accident in your car.  That is why it is important to understand your personal liability in your policy.  We can help you decipher what you have and what you need.  That is why we are in the business.

Finally why would you ever need life insurance?  You will never receive the benefits.  WRONG!!!  The most important benefit you will receive is peace of mind.  Every dollar that you bring into you home is relied upon. It would be bad enough to lose a loved one but to have your life change dramatically if that loved ones income is lost is salt in the wound.  Even if you are a stay at home parent, there is a lot of hidden finances.  You could have to find another job that pays less because you are needed at home, you have to hire someone to help out in the home, you have to find time to complete the chores and many more things.  According to Salary.com recently calculated that, in 2013, a stay-at-home mom in the United States was worth about $114,000 per year. While that six-figure salary may sound good, in order to earn it, Mom put in a 94-hour work week. If a full-time job is 40 hours per week, this outcome means that Mom's base salary is $37,549.  That would be a huge burden to take on if you lose a loved one on top of the feelings of loss.

Insurance is a thing that we never want to use but definitely need.  I personally pay a ton in insurance but that is because I know how important it is to have.  It only takes one bad thing to happen before your world can be flipped upside down and that is why I carry the coverage that I do as well as why I pay so much.  That is where my agency's motto came from," Hope for the best, but be protected from the worst."  I close in one question, "Is a few dollars now better than thousands at a later time?"