Insurance FAQs

Each fire protection agency (including your local fire department) is reviewed by the Insurance Services Office (ISO) and ranked based on their fire protection services, such as fire equipment, staffing and available water supply. The ranking is called the Public Protection Class (PPCTM) with 1 being the best score and 10 being the worst score. Many insurance companies use the PPC rating and the distance your home is from the nearest legally responding fire department to determine whether they will insure your home and how much to charge. For more information on PPC, please visit www.isomitigation.com or contact our agency.

Depending on the location of your home, the risk of wildfire may be a significant concern. In Colorado, the number of wildfires is increasing and the exposure to damage for homes near a high risk area is substantial.

Several insurance companies use a detailed rating and eligibility tool called LOCATION® FireLine™ from Verisk Analytics. This tool helps insurers assess wildfire risk at the address level. It uses advanced remote sensing and digital mapping technology to determine the impact of three factors that contribute to wildfire risk: fuel, slope and road access. Your property’s FireLine score can potentially impact not only your ability to obtain homeowners insurance coverage, but also the amount of premium you pay for your insurance policy. If you live in or near an area with an increased wildfire risk, it is important to reduce the risk and improve the overall safety of your home. To learn more about your home’s FireLine score and the steps you can take as a homeowner to reduce your exposure to wildfires, please visit http://www.veriskclimate.com/solutions/riskscape/wildfire-risk-scoring-fireline or contact our office.

Your home is probably the single largest investment you’ll ever make. By insuring your home, you are helping to protect your investment. Estimating the cost to rebuild your home will help you decide the amount of insurance you’ll want to purchase. The primary factors that’ll determine the cost to rebuild your home include:

• Local construction costs
• The square footage of your home (and the number of bathrooms and other rooms)
• The type of exterior wall construction – frame, masonry (brick or stone) or veneer
• The type of roof
• The number of floors (one to four stories, bi-level or split level)
• Special features like attached garages, fireplaces, exterior trim and arched windows
• Quality of materials and finishes throughout the home

Here are some tips to help you estimate your home’s value: Every year, take the time to check the value of your insurance policy against rising local building costs. Our agency is available to assist you with your review of your coverage.

• Check the latest building codes in your community. If your home is severely damaged, you might have to rebuild it to comply with new building code standards which may require a change in design or building materials. 
• Do not insure your home for the market value. The cost of rebuilding your house may be higher (or lower) than the price you paid for it or the price you could sell it for today. 
• Some banks require you to buy homeowners insurance to cover the amount of your mortgage. Make sure it’s also enough to cover the cost of rebuilding. 
• Increase the limit of your policy if you make improvements or additions to your house. You may upgrade features in your home to fit your tastes and lifestyle. These enhancements can significantly increase the replacement cost of your home. We are available to help you in your determination as to whether additional coverage is needed.

If the unexpected happens, losing your home contents could be distressing as well as financially devastating. Your Homeowners, Townhouse, Condo and Renters policies cover the loss of your personal belongings, subject to the policy limits and conditions. Many people make the mistake of underestimating the value of their home contents. This mistake is easily made when you consider the amount of new items we purchase each year. Under-insurance can lead to heartache and inconvenience should the unexpected happen. We are available to assist you with insuring your home contents.

A deductible is the amount you’re responsible for in the event of a covered loss. In most covered loss cases, you are responsible for any amounts up to your deductible level and your insurance would cover anything beyond that up to your coverage limit. 

For example, if you select a $1,000 deductible and have a $4,200 covered loss, you would receive a claim payment of $3,200 after deducting the $1,000. 

A homeowners deductible applies to each claim. If you have more than one claim in a policy period, you will be responsible for the deductible amount for each individual claim regardless of the number of claims you have during that policy period.

If you select a higher deductible, you will be responsible for paying more out of pocket. However, you’ll typically pay a lower policy premium. The opposite is true if you select a lower deductible option: because the insurer will pay a larger portion of any loss, you’ll typically pay a higher policy premium. We can review available deductible options with you to help you decide what option is best for your individual situation.

Nothing is worse than the feeling you get when you are responsible for damage to someone else’s property or for someone else’s injuries. We can assist you with your selection of coverage to help you alleviate this financial worry. This coverage is part of your homeowners insurance policy. It protects you and your family against property damage or bodily injury claims for which you are legally responsible. Liability insurance covers you, for example, if someone slips and falls on your property or if your dog bites someone. Today, when multimillion-dollar lawsuits are common, your homeowners policy may provide substantial liability limits, but it may not be enough. A Personal Liability Umbrella policy is available to supplement your present policies and provides additional coverage in increments of $1 million.

Lawsuits are common today. If you accidentally injure someone or damage their property, you could be sued. And more and more, juries are awarding very large verdicts. Your homeowners, property and auto policies may provide substantial liability limits, but juries can award sums that exceed those limits. Personal Liability Umbrella insurance acts like an umbrella, providing additional coverage on top of your auto and homeowners liability policies. It supplements your existing policies to provide additional personal liability protection. The Umbrella policy goes into effect after the underlying liability limits on your homeowners or auto policy is exhausted. Therefore, your base auto and home policies must have certain limits in order to qualify for an Umbrella policy. The policy provides:

• Liability insurance that adds to the limits of your automobile, homeowners and recreational vehicle or boat liability policy limits.
• Coverage for unknown or unexpected exposures that are excluded in typical auto, homeowners, recreational vehicle or boat liability policies.
• Coverage for the cost of your legal defense. This includes court costs, interest on judgments and premiums on necessary bonds.

You may extend your personal liability coverage from your home and umbrella policies to vacant land you own or rent.

A neighbor slips on my sidewalk and threatens to take me to court for damages. 

Yes. Homeowners insurance will pay for damages, if the accident is the result of your negligence. It will also pay for the legal costs of defending you against a claim. Also, the medical payments part of your Homeowners policy will cover medical expenses arising from an injury to a neighbor or guest.

There is limited coverage available for your valuables. In most cases, you may want to consider purchasing a Personal Articles Floater, which provides coverage for your personal articles, such as jewelry, furs or fine arts, when their value is higher than the limits stated in your policy. We can help you when you are deciding if you need to purchase this coverage.

Yes. The value of precious metals and gemstones is constantly changing. So even if you’ve had your jewelry appraised before, it’s always a good idea to have it appraised again for its current market value. If, for example, your engagement ring was originally appraised for $3000 five years ago, its value may have increased since then. In the unfortunate event that your ring is lost or stolen, having a recent appraisal handy (with a thorough description of the item being insured) will help with the reimbursement process. Keep in mind that recent appraisals are usually required for expensive pieces of jewelry when you purchase additional coverage, like a Personal Articles Floater. (Depending on the value of the item, you’ll be required to provide a detailed sales receipt or appraisal.)

If your home becomes uninhabitable due to a covered loss, we pay for those extra costs of housing, eating expenses, etc. up to the applicable limit.

Yes. Typically, your homeowners insurance covers a large number of perils, including all those listed.

Homeowners Insurance policies typically do not cover but not limited to damage resulting from the following:

• Earth movement
• Water
• Nuclear hazard
• Neglect or failure to make repairs
• Corrosion, deterioration, decay or rust
• Wear and tear
• Contamination
• Fungi
• Increased cost due to enforcement of any building ordinance or law
• Government actions
• Power failure
• Animals or pests
• War

Yes. Typically, homeowners insurance covers you for accidental discharge of water from a plumbing system. Check your plumbing and heating systems once a year. While you are covered for this type of damage, who needs the mess and hassle?

No. Earthquake coverage is available as a separate coverage. To determine whether you should purchase this insurance, talk to us.

Generally, you should contact your agent who will assist you in a review of your coverages whenever you change something significant about your home or its contents, for example, you should review your coverage:

• when you put on an addition to your home;
• when you start a business from your home;
• when you make a major purchase, such as jewelry or a computer;
• when you purchase other residential properties either for rental or as a second home.

When reconstructing a home, there are a few key areas that come into play that are not there when building a new home.

When building a new home, your builder can sometimes buy materials in bulk at a discounted price since new home construction often involves multiple home sites. During reconstruction though, materials are bought for a single home and it may not be possible to get the same bulk discount, resulting in a higher price. In addition, inflation increases the cost of materials over time. Labor costs are also typically higher for reconstruction compared to new construction. During reconstruction, workers may need to remove debris, demolish parts of the home, and align new materials with existing home materials. These processes are more labor intensive and as a result, more expensive. Also, new construction builders–especially those building a home as part of a larger development—can sometimes take advantage of economies of scale in hiring workers at a lower rate and more efficiently schedule workers than during reconstruction of a single home. Building a new home starts from the ground up, but reconstruction usually starts with parts of an existing home. Access to the site is harder during reconstruction because there is usually debris to remove, possible demolition, and homes and property nearby to navigate. Often special trucks and equipment are needed to reconstruct a home.

Other differences can exist between new construction and reconstruction. For current customers, you should review your policy documents, including the notice that shows what information is used to calculate your home’s reconstruction cost estimate. It’s important to contact your our office if anything has changed.

Homeowners who guard against theft, accidents and other losses can often get lower insurance rates and policy discounts. Here are some things you can do to help qualify for lower premiums:

• Secure your home with dead bolts and window locks.
• Install a security system with an outside signal and connection to local police.
• Install and maintain smoke detectors.
• Install a sprinkler system for fire.
• Install a fire alarm that automatically alerts the local fire department.
• Stop smoking.
• Keep walks and entrance ways clear of snow and ice.
• You may also qualify for discounts on premiums when you buy both homeowners and auto insurance.