Isn't That Rich Podcast

Understanding the details of home insurance can be overwhelming, with policy documents often spanning dozens of pages. Instead of trying to decipher your policy on your own, we invited Eric Witges, COO of FSB Insurance onto the show to simplify it for us. He’s here to break down the ABC's of home insurance coverage so you can understand exactly what you're protected for and your policy covers.

Coverage A: The Dwelling

Coverage A pertains to the dwelling itself—essentially, the structure of your house. This includes everything that's physically attached to the home, such as shingles, siding, windows, doors, and even cabinets. For instance, if a windstorm damages your roof or a fire affects your home's structure, Coverage A would take care of these repairs. 

This includes:

• Roof: Shingles, metal panels, and tiles.
• Walls: Both interior and exterior walls, including drywall and paint.
• Windows and Doors: All types of windows and doors, including storm doors.
• Attached Structures: Garages, decks, and patios.
• Built-in Appliances: Central air conditioning units, furnaces, and water heaters.

If a fire, windstorm, or other covered peril damages your home's structure, Coverage A steps in to handle the repairs. It's essential to ensure your coverage amount accurately reflects the cost to rebuild your home, considering all the features and finishes that make it unique, such as square footage, type of materials used, and the quality of finishes.

Coverage B: Other Structures

Coverage B applies to other structures on your property that are not attached to your house. This could include tool sheds, carports, fences, solar grids, and unattached garages. Typically, Coverage B is set at 10% of the dwelling coverage. For example, if your home is insured for $200,000, Coverage B would provide $20,000 for these additional structures. Given the potential high cost of rebuilding structures like large barns or workshops, it might be necessary to discuss with your insurance agent about increasing this coverage through an endorsement.

This includes:

• Tool Sheds: Small to large sheds used for storage or workspaces.
• Carports: Unattached shelters for vehicles.
• Fences: Wooden, metal, or vinyl fencing around your property.
• Solar Panels: Ground-mounted solar installations.
• Gazebos and Pergolas: Outdoor structures for shade and relaxation.
• Detached Garages: Separate buildings for parking and storage.

If you have significant structures like a large barn or workshop, discuss increasing this coverage with your insurance agent.

Coverage C: Personal Belongings

Coverage C covers your personal belongings—everything you would pack if you were to move. This includes clothes, appliances, electronics, furniture, jewelry, and more. If a covered event like a windstorm or fire damages your personal items, Coverage C ensures they can be repaired or replaced. Additionally, some high-value items like jewelry or art might need to be specifically scheduled on your policy to ensure full coverage.

This includes:

• Clothing: All your apparel and accessories.
• Furniture: Sofas, beds, tables, chairs, and other furnishings.
• Electronics: TVs, computers, smartphones, and gaming consoles.
• Appliances: Washer, dryer, refrigerator, microwave, and other portable appliances.
• Jewelry: Rings, necklaces, watches, and other valuable items.
• Kitchenware: Dishes, utensils, pots, and pans.
• Decor: Artwork, rugs, curtains, and other decorative items.

If a covered event like a windstorm or fire damages your personal items, Coverage C ensures they can be repaired or replaced. It's a good idea to document your belongings by taking photos or videos of each room and keeping receipts for valuable items. Again, high-value items like jewelry or art might need to be specifically scheduled on your policy to ensure full coverage. We recommend the NAIC Home Inventory App available on the Apple App Store and on the Google Play Store to keep record of all your belongings.

Recent Changes in the Insurance Industry

Eric also highlighted recent shifts in the insurance industry, particularly regarding roof coverage. Insurance carriers are now evaluating roofs based on their type and age, which affects the settlement percentage if a roof needs to be replaced. For instance, a metal roof might retain more value over time compared to a shingle roof. It's crucial to discuss these details with your insurance agent to understand how your roof type and age affect your coverage.

The Importance of Regular Updates

It's essential to regularly review your insurance policy with your agent to ensure that all updates and additions to your property are covered adequately. This includes not only structural changes but also significant purchases like new appliances, electronics, or valuable art. Regular check-ins help adjust the coverage amounts to reflect current replacement costs, which have been rising due to factors like inflation and increased material costs. Proper home insurance coverage is crucial for protecting your investment and ensuring you can rebuild and recover fully in the event of a loss. For personalized advice and to make sure your coverage meets your specific needs, reach out to your insurance agent today.