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Topics in Homeowners Insurance
Homeowners Insurance Coverages in Plain English
Who needs insurance industry jargon? Read this to get an explanation of your homeowners insurance coverages in plain English.
What Is Replacement Cost?
Why does your agent have your policy for a different amount than your house is worth? Read this article to learn why the amount of insurance
on your homeowners policy is completely unrelated to the value of the house.
Presrving the Value in Your Valuables
Do you know if your homeowners or renters policy will cover your jewelry, electronics, or computer equipment? Do you know if they will be
replaced at the full value, or if the payment will be reduced for depreciation? Do you know if they are covered if they are stolen, lost, or broken?
Avoiding Insurance Nightmares with Vacant Homes
You have taken care of your home all these years, but now you have moved and the house is vacant. Do you know what changes on your insurance coverage
when the house is vacant? More importantly, do you know how to prevent uninsured losses? Read this to learn about vacancy insurance.
Insuring a Home-Based Business: Why Most Home Businesses Could Go Up in Smoke
About three out of every ten people operate some sort of home business. Their businesses vary widely, and so do their insurance needs.
But they have one thing in common: A typical homeowners policy probably does not cover their businesses the way they think it does.
Flood and Water Damage: What Does a Homeowners Policy Cover?
Water damage is tricky on a homeowners policy, because the answer is, "It depends." It depends on where the water comes from, and what it damages.
It also depends on your company and your policy. Are you covered for storm damage? Frozen pipes? Flood? Find out here!
So Why Didn't Her Policy Pay the Cost To Satisfy the Building Codes?
Most homeowners policies reimburse you
only for the same quality of roof as the one that was damaged. What if building codes have changed since your home was built, and now you are
required to meet a higher standard? How can you make your policy pay the difference? Find out here!
Five Ways To Protect Your Home from Winter Storm Dangers
We hope you don't experience a storm-damaged roof, leaking basement, or frozen pipes this winter. Nobody wants to
go through that. Here are five very smart ways you can prepare for winter, either to avoid damage, or to be prepared
if it happens despite your preparation.
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How NOT To Lose Your Home-Based Business
 Christy M. Perry, President
Community Insurance Center, LLC
About three out of every ten people operate some sort of home business, according to the U.S. Bureau of Labor
Statistics, but a typical homeowners policy does not cover a home-based business. You need coverage for your
business property and for liability. So how do you get the right coverage, without spending all of your profits on
insurance?
(Note that this article is only about the property and liability policy. If you use your car primarily for business, or
the car is owned by the business, or if you have employees, you probably have additional needs to discuss with
your agent.)
Option 1: Coverage by Endorsing Your Homeowners Policy
A homeowners policy by itself does not cover a home-based business. Depending on your type of business and
your insurance company, however, one way to get the right coverage is by adding an endorsement to your
homeowners policy to cover your home business.
- This coverage is usually fairly inexpensive, but it is usually fairly limited. Coverage might cost less than $50 per year.
- It might increase the amount of coverage for your business personal property, and might provide coverage for bodily injury or property damage.
- It probably will not include products liability or professional liability.
This option might be best for a small in-home retail business. There are many companies that rely on independent
reps to sell their products through in-home parties. One example might be someone who sells another company’s
jewelry, but does not make her own jewelry. Her computer and her samples stored in her home office would be
covered, and she would have liability protection if a customer in her home for a jewelry party falls and is hurt.
It can also be good for others who work from a home office, such as realtors or certain types of consultants.
That's because it covers your business personal property (computer, records, signs, marketing materials, etc.)
and your liability for clients or associates who might come to your home office.
Option 2: Coverage through an In-Home Business Policy
Think of this as the "in-between policy." Some businesses need more coverage than a homeowners policy can
provide, but not too much. There are companies who sell a special commercial policy designed specifically for in-
home businesses.
- It is a business policy, so it is designed for the unique risks that businesses face, such as products liability.
- However, it is designed for a home business, so it does not cover the house itself—the dwelling is already covered by the homeowners policy.
- Depending on your options, your coverage might cost less than $200 per year and up.
This makes it a good fit for a small in-home studio or workshop. It is usually more expensive than endorsing the
homeowners policy (described above), but it is much more affordable than a full-fledged business owner’s policy.
This option might be good for someone who makes her own jewelry and sells it at home, by mail-order, on the
web, or at craft fairs. Some cities require the business to show proof of liability coverage (sometimes with the city
named as an additional named insured) to be allowed to participate in a craft fair in the city.
Be aware that this is a specialized product, and not all companies offer it.
Option 3: Coverage through a Business Owner's Policy
Eventually a business reaches a point where it needs broader, deeper coverage. A business owner's policy (BOP)
provides higher amounts of coverage than an in-home business policy, and it can also cover the building itself, if
necessary.
This option might be good for a business that has moved into its own quarters, either a workshop in the backyard,
or a location entirely away from the home. It would also be a better choice for a business with employees.
Although the coverage is more expensive than the other options—probably several hundred to several thousand
dollars per year—it is the most appropriate way to protect a business. You have worked hard to build your
business to this point. Don’t risk losing it by refusing to buy the right kind of coverage.
Insuring Your Home Business Is Tricky
So which option--or even another option--is right for you? The answer is, "It depends." Please don't rely only on
an article like this, or any other article on the Web. By their very nature, articles don’t know who you are or what
you need. Also, coverage varies from company to company and from state to state.
The best thing you can do is sit down with your insurance agent and review your risks and your needs. The two
of you can find the right balance between more coverage and less money.
Also remember that you might have other insurance needs for your business. Auto insurance is a subject in itself,
as are workers compensation, professional liability, and others.
Your business is one of your biggest assets, so you need to protect it properly. More importantly, it is your dream.
If your policy cannot be adjusted to get the coverage you need, consider shopping for a different company. And if
your agent cannot answer your questions, consider shopping for a different agent. This type of consultation is the
agent's job. It is why you pay him! Don’t you deserve to have your business properly protected?
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