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.

How NOT To Lose Your Home-Based Business
You need more protection for your home-based business than you'll get from your plain homeowners policy. But if you have a small business, you don't want the insurance to eat up all of your profits. So what options do you have?

Insuring a Home-Based Business: Why Most Home-Based 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.

Homeowners Insurance and The Spiderwick Chronicles

I took my family to see The Spiderwick Chronicles recently. Great movie! For those who have not seen it yet, I will not give away anything that is not in the trailer. A family moves into a beautiful old Victorian mansion, and the kids discover that magical creatures really exist all around us, if only they will let us see them. Some of the creatures want to help the kids, but some want to harm them. In the end, a band of goblins and an ogre attack the family in their house.

My first words after the lights came up were, "Hmmm ... I wonder if the goblins would be classified as vermin. Because if they are, then there might not be coverage under the homeowners policy."

Okay, part of this is just the whole obsessive-compulsive disorder showing through. But as long as we are on the subject, letss take a tongue-in-cheek look at a few concerns for the homeowners.

First, is the damage to the house covered? The better homeowners policies cover the house on an "all- perils" basis, except for those things that the policy specifically excludes. (These policies are based on the "HO-3" or "Special Form.") This means that things like fire, hail, or wind damage to the building are covered, because the policy does not say that they are not covered. But it is very common for policies to exclude damage caused by insects, rodents, or vermin. Most policies do not define the word "vermin," but most dictionaries define it as "noxious animals" or "undesirable or troublesome pests." So if goblins are vermin, then these homeowners have another problem.

Second, what about when the ogre picks up the grand piano and dumps it upside down? Over 90% of homeowners policies sold in Ohio cover the family's furniture and possessions on a "named perils" basis. This means that only the causes of loss listed in the policy are covered. Typically losses caused by fire, theft, water damage from burst pipes, and several other perils are covered; but damage caused by animals usually is not covered for furniture and possessions. And I have never seen a policy promising specifically to cover damage caused by ogres.

Finally, what about the whole tomato juice incident? I will not spoil it for those of you who have not seen the movie yet, but let us just point out that the kids did it on purpose. Intentional acts of the insured are never covered. They will have to clean that one up on their own.

So these are my thoughts after seeing the movie. The movie was fantastic, and I recommend it enthusiastically. But if you live in a goblin-prone area, you might want to discuss this with your agent during your next annual protection review.