This week, Danny Lipford chats with Michelle Tennant from Erie Insurance to discuss how folks can find peace of mind with homeowners insurance. (3 Echoes Content Studio/Erie Insurance)
This week, I’m talking with Michelle Tennant, vice president of Product Management in the Erie Insurance Personal Lines division.
Michelle has been with Erie since 2001 and has helped to develop Erie Insurance’s Auto, Umbrella, and Renters insurance products, as well as its Homeowners insurance coverages.
Erie Insurance has been in business since 1925, and for nearly a century we’ve been providing home, auto, business and life insurance.
We are based in Erie, Penn., and we serve customers in about 12 states. We know insurance can be complicated so with every policy, we have a knowledgeable independent agent within your community that can guide you through the process to get the right coverage for your life.
Homeowners insurance provides financial protection in the event of a disaster. (Mohamad Fazil Bin Ramli/Getty Images)
Why You Need Homeowners Insurance
Every homeowner has homeowners insurance but many don’t know why — what is the purpose of homeowners insurance?
Michelle: Homeowners insurance provides financial protection in the event something crazy happens, like an accident or weather-related event that damages your home.
At Erie Insurance, we think about this in a few different ways.
First is the home itself — the structure. It would cover the exterior of your home if there is damage.
Next is your personal property. A policy will cover valuable items that are important to you inside your home should those be damaged or stolen.
Another thing is liability. If you were responsible for damage to someone else’s property or someone was injured on your property or if your pet injures someone.
Additionally, I’d like to add, one coverage that Erie offers and we recommend all customers have is guaranteed replacement cost. If your home is destroyed, this coverage will to pay to rebuild it to matter what the cost. If you don’t have it, you might come up short up on funds and face steep out-of-pocket costs.
Some home insurance policies only cover a certain amount of square feet, so let your agent know if you’re planning to remodel. (Adobe Stock)
What to Talk About With Your Agent
What all should you discuss with a home insurance agent?
Michelle: You should have an open dialogue with your agent. Make sure everything that is important to you in and around your home is covered.
If you’ve remodeled your home or plan to remodel, tell your agent. Do you run a business out of your home? Make sure to mention that so your business materials are covered. And, let your agent know if your family is growing or changing.
These are just a few things you want to talk about with your agent. With that information, they can get the ball rolling and find the coverage that’s right for you.
When compiling a home inventory, save receipts for big-ticket items. Original receipts are always best, but a photocopy can work in some cases. (c-George, Getty Images)
Creating a Home Inventory
How do you even start the process of creating a home inventory?
Michelle: If a catastrophic event were to happen, it can be extremely overwhelming to remember for memory everything valuable in your home.
When creating a home inventory, begin at a small starting point. Maybe your most valuable items or go from room to room.
Take videos or photos and narrate or write down what each item is so you remember in the future. Categorize clothing and keep receipts.
Apps are popular and there’s an app for everything, even home inventories. Shortly, Memento Database and Nest Egg are a few you can use.
You can find a checklist of what you need on the Today’s Homeowner page on Erie’s website.
A renter’s policy from Erie Insurance can protect your belongings after a covered loss. (designer491, Getty Images)
Renter’s Insurance
Let’s not leave our renter friends out of the conversation. Talk about renters insurance for those who are the tenants.
Michelle: If you’re renting, you should definitely consider a renter’s policy. Your landlord probably has a policy to cover the building or structure, but not what’s inside. You’ll need some kind of coverage to protect your personal property.
Erie Insurance’s Secure Tenant policy covers your personal property or loss of use in case you need to relocate. It also provides coverage to protect your possessions if they’re damaged lost or stolen, even if you’re away from home.
Erie Insurance offers a variety of policies and endorsements to help protect your property. (Joe_Potato, Getty Image)
Insurance for Landlords
Is there a different type of policy for a homeowner who wants to lease out their home? Michelle: Landlord insurance policies are somewhat different. If you’re a homeowner and thinking about renting out your property, the Secure Rental product from Erie Insurance is what you need. It’s basically made for dwellings rented to others for one- or two-family homes. That provides similar coverage to our home products, and with that you’ll also get the guaranteed replacement cost.
Overall Advice
Talk to a local independent insurance agent to review your policy to make sure you have the coverage that’s right for you. It will give you some peace of mind to know you have the protection you need in case a disaster happens.
Check out Today’s Homeowner page on Erie’s website. It has a lot of videos and articles about your home to keep you safe and prepared for the unexpected.
Further Reading
Ask a Question! (Podcast)
Ask a question and we could answer it on the “Today’s Homeowner Podcast!” We also may use it on our nationally syndicated radio broadcast or on todayshomeowner.com.
This week, Danny Lipford chats with Michelle Tennant from Erie Insurance to discuss how folks can find peace of mind with homeowners insurance. (3 Echoes Content Studio/Erie Insurance)
This week, I’m talking with Michelle Tennant, vice president of Product Management in the Erie Insurance Personal Lines division.
Michelle has been with Erie since 2001 and has helped to develop Erie Insurance’s Auto, Umbrella, and Renters insurance products, as well as its Homeowners insurance coverages.
Erie Insurance has been in business since 1925, and for nearly a century we’ve been providing home, auto, business and life insurance.
We are based in Erie, Penn., and we serve customers in about 12 states. We know insurance can be complicated so with every policy, we have a knowledgeable independent agent within your community that can guide you through the process to get the right coverage for your life.
Homeowners insurance provides financial protection in the event of a disaster. (Mohamad Fazil Bin Ramli/Getty Images)
Why You Need Homeowners Insurance
Every homeowner has homeowners insurance but many don’t know why — what is the purpose of homeowners insurance?
Michelle: Homeowners insurance provides financial protection in the event something crazy happens, like an accident or weather-related event that damages your home.
At Erie Insurance, we think about this in a few different ways.
First is the home itself — the structure. It would cover the exterior of your home if there is damage.
Next is your personal property. A policy will cover valuable items that are important to you inside your home should those be damaged or stolen.
Another thing is liability. If you were responsible for damage to someone else’s property or someone was injured on your property or if your pet injures someone.
Additionally, I’d like to add, one coverage that Erie offers and we recommend all customers have is guaranteed replacement cost. If your home is destroyed, this coverage will to pay to rebuild it to matter what the cost. If you don’t have it, you might come up short up on funds and face steep out-of-pocket costs.
Some home insurance policies only cover a certain amount of square feet, so let your agent know if you’re planning to remodel. (Adobe Stock)
What to Talk About With Your Agent
What all should you discuss with a home insurance agent?
Michelle: You should have an open dialogue with your agent. Make sure everything that is important to you in and around your home is covered.
If you’ve remodeled your home or plan to remodel, tell your agent. Do you run a business out of your home? Make sure to mention that so your business materials are covered. And, let your agent know if your family is growing or changing.
These are just a few things you want to talk about with your agent. With that information, they can get the ball rolling and find the coverage that’s right for you.
When compiling a home inventory, save receipts for big-ticket items. Original receipts are always best, but a photocopy can work in some cases. (c-George, Getty Images)
Creating a Home Inventory
How do you even start the process of creating a home inventory?
Michelle: If a catastrophic event were to happen, it can be extremely overwhelming to remember for memory everything valuable in your home.
When creating a home inventory, begin at a small starting point. Maybe your most valuable items or go from room to room.
Take videos or photos and narrate or write down what each item is so you remember in the future. Categorize clothing and keep receipts.
Apps are popular and there’s an app for everything, even home inventories. Shortly, Memento Database and Nest Egg are a few you can use.
You can find a checklist of what you need on the Today’s Homeowner page on Erie’s website.
A renter’s policy from Erie Insurance can protect your belongings after a covered loss. (designer491, Getty Images)
Renter’s Insurance
Let’s not leave our renter friends out of the conversation. Talk about renters insurance for those who are the tenants.
Michelle: If you’re renting, you should definitely consider a renter’s policy. Your landlord probably has a policy to cover the building or structure, but not what’s inside. You’ll need some kind of coverage to protect your personal property.
Erie Insurance’s Secure Tenant policy covers your personal property or loss of use in case you need to relocate. It also provides coverage to protect your possessions if they’re damaged lost or stolen, even if you’re away from home.
Erie Insurance offers a variety of policies and endorsements to help protect your property. (Joe_Potato, Getty Image)
Insurance for Landlords
Is there a different type of policy for a homeowner who wants to lease out their home? Michelle: Landlord insurance policies are somewhat different. If you’re a homeowner and thinking about renting out your property, the Secure Rental product from Erie Insurance is what you need. It’s basically made for dwellings rented to others for one- or two-family homes. That provides similar coverage to our home products, and with that you’ll also get the guaranteed replacement cost.
Overall Advice
Talk to a local independent insurance agent to review your policy to make sure you have the coverage that’s right for you. It will give you some peace of mind to know you have the protection you need in case a disaster happens.
Check out Today’s Homeowner page on Erie’s website. It has a lot of videos and articles about your home to keep you safe and prepared for the unexpected.
Further Reading
Ask a Question! (Podcast)
Ask a question and we could answer it on the “Today’s Homeowner Podcast!” We also may use it on our nationally syndicated radio broadcast or on todayshomeowner.com.
If disaster strikes, will your homeowners insurance cover the cost to replace your home? A basic policy might not be enough to provide peace of mind — you need guaranteed replacement cost coverage.
If your home insurance is lacking, you might be paying out of pocket to rebuild your home. (bjunda, Getty Images Signature)
What is Guaranteed Replacement Cost?
When something goes wrong, such as a natural disaster or a fire, the insurance company will cover your loss—or at least, up to a certain dollar amount—after you pay a deductible based on your policy’s terms and conditions.
Many people believe an insurance policy will cover all the damage after a disaster. Unfortunately, this isn’t automatically true — and many people don’t realize it until it’s too late.
For example, if an electrical fire claimed your home, depending on the type of insurance coverage you have, your policy might only cover the home’s current value minus depreciation and wear and tear. That means the insurance company wouldn’t write a check to cover the entire cost of building a new house if construction costs significantly increased due to inflation or unforeseen circumstances.
You could pay out of pocket to cover the remainder — or cut costs by sacrificing some of your old home’s features. But those options add steps and stress to the project during an already difficult time.
Guaranteed replacement cost, on the other hand, covers the amount to repair or replace your home after a covered loss — even if it would cost more to rebuild your home today than it did when you bought it.
With Erie Insurance’s Guaranteed Replacement Cost coverage, you’re covered even if you have to build a new home.
Of course, there are some important terms and conditions.
Under Guaranteed Replacement Cost coverage, you must report home improvements over $5,000 — such as, say, new construction on an addition — within 90 days. Depreciation may be deducted until repair or replacement is.
In addition, the coverage of costs is subject to limits and must comply with laws or ordinances, so terms may vary based on where you live.
Guaranteed Replacement Cost Coverage is not available in all states, so check with your insurance agent to see if you qualify.
Guaranteed Replacement Cost covers the amount to rebuild your home, even if it costs more to rebuild today than when you bought it. (brittak, Getty Images Signature)
Why You Need Guaranteed Replacement Cost
Even if your homeowners insurance has a high limit, the cost to repair or rebuild is always in flux.
Your policy’s current limit might allow you to completely rebuild your home this year, but if building costs and inflation rise, it may only cover a portion of that next year.
Guaranteed replacement cost coverage, then, provides greater peace of mind than policies that deduct for depreciation when calculating reimbursement.
If you don’t have guaranteed replacement cost coverage, the work stops when the money runs out. So, you’re left with an incomplete project that you must pay out of pocket to finish.
Having this coverage could potentially save you thousands of dollars after a disaster.
Insurance can be complicated, so speak with an Erie Insurance agent to find the best policy for you. (Pixelshot)
Which Insurance Policy is the Best?
Now that you know what guaranteed replacement cost is, it’s time to consider what type of policy you need to accompany it.
A common question is, “How much coverage should I get for my home?” The answer boils down to how much you’re willing to sacrifice — which should be nothing.
Always opt for full coverage. If you go with any less, you could potentially lose tens to hundreds of thousands of dollars if something goes wrong — just to save a couple of hundred dollars in an annual premium.
Home insurance can be complicated, so let an experienced agent help you assess your needs and risk tolerance to find the right coverage.
Erie Insurance, established in 1925, has claims adjusters who are trained to know how different homes are constructed, the materials used, and which kinds of damage can occur.
Their independent agents provide 24-7 support, a wide array of coverages, and no gray areas so that you’re provided with a full understanding of your policy.
Need more living space for your growing family? Don’t immediately call a real estate agent or contractor — first, talk with an independent insurance agent before you move or renovate.
The Importance of Working with a Pro
Your home is your most valuable asset. Homeowners insurance provides financial protection in the event the structure is damaged such as by fire or severe weather. It can provide peace of mind but choosing a policy can be complicated.
For instance, how much coverage do you need for the structure? What about your valuables? What is a good deductible? Do you need guaranteed replacement cost coverage? It’s also important to understand a policy’s exclusions, and whether an additional policy is needed for special events like floods and earthquakes.
An independent insurance agent can remove all the guesswork, guide you through the different coverage options, and match you with the protection that fits your needs and lifestyle.
Independent insurance agents can help you find the coverage you need and, often, save you money. (Adobe Stock Photo)
Why Work with an Independent Insurance Agent
There’s no shortage of homeowners insurance providers and coverage options. Some providers have offices in your community; otherwise have out-of-state headquarters; and still, others have international offices with U.S. branches and licenses for local coverage.
You could search the web for companies that cover your area, but the results might be daunting — and where would you even start?
Instead, you can save a lot of time by contacting an expert who can ask you questions about your home and identify the necessary protection.
Independent agents can represent multiple insurance providers, as opposed to so-called “captive” agents who usually represent just one company. So, they can help you find the right insurance company and coverage for your needs at competitive rates.
Not only will they compare premiums — the amount you must pay every year to keep a policy active — but they also will compare policy coverage and limitations.
First, it’s important to find a quality agent with a reputable company.
For instance, Erie Insurance, this post’s sponsor, was founded in 1925 and serves 12 states — Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin, along with the District of Columbia.
The company has a long track record and its property/casualty companies are rated A+ (Superior) by A.M. Best, a global credit rating agency with a focus on the insurance industry.
Independent insurance agents live in the communities they serve, so they know which types of risks need to be covered. (sshepard, Getty Images Signature)
Why Local Knowledge Matters
A homeowners insurance policy is not a one-size-fits-all situation — that’s why you need local knowledge to build the best plan.
Different areas have different risks — for instance, the U.S. Atlantic Ocean and Gulf of Mexico coasts are prone to hurricanes, whereas California sees more earthquakes than other states; and areas across the country have tornadoes.
Also, houses are built differently based on the location — for instance, homes in the southern United States may have slab foundations, whereas many northern U.S. homes have basements — and each requires the right coverage.
Independent insurance agents have offices in your neighborhood and are a part of your community, so you’ll know you’re working with someone who understands local home construction, the area’s typical weather, and the coverage you need.
Erie Insurance agents, for instance, often check in with customers to touch base and make sure their coverage is up-to-date.
Talk to an insurance agent to make sure your policy covers a home addition. (Willowpix, Getty Images Signature)
Filling in the Gaps
Whether you’re buying your first home, moving to a new one or just making improvements, it’s important to contact an independent insurance agent.
If you’re buying a new house, you need to consider moving insurance, especially for long-distance moves that involve interstate or cross-country travel. It will cover you during the move and it’s usually not necessary to purchase an additional policy.
Keep in mind there are limits for certain kinds of misplaced, lost or stolen personal property. Your insurance agent can help you find the best coverage and set expectations before the big move.
If you’re building an addition to your home to create more living space or making major improvements, let your insurance agent know. An addition can increase your home’s value — your agent will advise on whether your insurance policy has enough coverage to keep up.
It’s just one more reason why it pays — literally — to work with an independent insurance agent.
It’s important to get the best insurance possible with 100% coverage.(DepositPhotos)
Just as there are different home styles, insurers offer a menu of different policies. For the majority of single-family homeowners, the most appropriate policy is the HO-3, sometimes called the Special Form. It insures all major perils, except flood, earthquake, war, and nuclear accident.
You’ll need deep coverage, up to and including 100% of your home’s replacement cost. By insuring at, say, 90%, you’re gambling that you won’t suffer a complete loss. To be safe, always insure at 100%. Research on some insurance companies and compare their insurance services and rates to choose the best deal. If you own a mobile home, there are companies that you can contact to find a great deal on a Mobile Home Insurance Plan.
Insurers generally cover a home’s contents between 50% and 75% of the home’s value. Make a list of your home’s contents for a more accurate estimate of your needs. That way, you’ll have a written record if you need to file a claim. The industry-sponsored Insurance Information Institute provides useful instructions on how to put together an inventory.
You’ll also have to pick a deductible, which is the amount you will pay before the insurance kicks in. Remember, the higher the deductible, the lower your premium will be.
Here are some tips to help you make the right choices about homeowners insurance.
If your home is damaged, insurance could pay to get it fixed, even if the cost is more than the home’s original value.
Buy the guarantees
Traditional guaranteed replacement cost coverage promises to pay whatever it takes to rebuild your home, even if it costs more than the original limits you purchased. That’s crucial in the event that labor and building costs balloon after a major disaster. In many states, large insurers may cap the guarantee at 120% to 125% of purchased limits. Several preferred carriers offer even higher coverage. Speak to your insurance agent for more information. Also, ask for replacement cost coverage for your home’s contents. Without it, you’ll end up with the depreciated value of any object that’s damaged or stolen.
Extra coverage can come in handy when you least expect it to.
Get these types of important coverage, too:
–Inflation guard: This option annually increases your coverage at the rate of local building-cost inflation.
–Ordinance-and-law coverage: This rider, which covers the costs of bringing your home into compliance with current building codes, is a must if your home is more than a few years old.
–Limit your liability: Your homeowners policy protects against lawsuits for accidents that happen on your property. It also covers you if your dog bites someone. You might also consider adding an umbrella policy, which provides additional coverage over and above your regular homeowners liability limits.
Good insurance policies will come in handy if your home is hit with a natural disaster such as a hurricane or tornado(DepositPhotos)
Consider these options:
–Displacement: Your homeowners policy also provides for living expenses if you need to secure other housing while your home is being repaired or rebuilt.
–Other structures: Replacement of structures such as garages, detached covered porches or patios, and sheds.
–Medical Coverage: Provides coverage for medical expenses if someone is injured on your property.
–Home business coverage: Business property worth more than $2,500 isn’t covered by a homeowners policy, so buy a separate policy — also known as a rider — to fill the gap. Business liability coverage must be purchased separately, too.
–Riders for valuables: A standard policy provides minimal coverage for antiques, collectibles, furs, silver, jewels, cameras, computers, musical instruments, and firearms. For these, you may need additional or separate coverage. Again, speak with your insurance agent about the proper coverage for your specific needs.
