Understanding Your Coverage
At Goosehead Insurance, we strive to educate our clients on the different products available to insure and protect their lifestyle. The information below will help you understand your insurance policies. As always, if you have any questions, please don’t hesitate to give us a call at 1-800-474-1377.
There are many different policy forms you can purchase – and the coverage varies significantly! The most common forms are the HO1, HO2 and HO3. In Texas they may also be referred to as HOA, HOB and HOC.
HO1 – This is the “basic” form that covers only 9 causes of loss It is notably missing coverage for any water damage for your house.
- Riot/Civil Commotion
- Vandalism & Theft
HO2 – This is the “broad” form. In addition to the 9 causes of loss covered on the HO1, the HO2 adds 8 more. This is the lowest level policy that includes some water coverage.
- falling objects
- weight of ice/sleet/snow
- sudden and accidental water
- sudden electric current & volcano
HO3 – This is the “special” form – and is the one our agents recommend. Instead of listing what is covered, the HO3 begins with the assumption that everything is covered. It then lists out a few things that are specifically excluded. These include war, wear & tear, nuclear disaster, intentional acts, flood, governmental actions, earthquake. These exclusions are typically not covered under any home insurance policy – or require a separate insurance policy (i.e. flood).
When a new client calls Goosehead, this is the area in which we typically find the biggest coverage gaps on their prior policy. Water is broken into 4 categories (outside of flood – which is a separate policy), and many agents outside of Goosehead only include 1 or even none of them! The water coverages are:
Sudden & Accidental Water Damage – discharge of water from broken pipes, water heaters, dishwashers, washing machines, etc that causes damage to your house.
Water Backup - covers water damage that backs up through sewers or drains; or is otherwise discharged from a sump, sump pump or related equipment.
Foundation Water Damage - covers settling, cracking, shrinking, bulging, or expansion of the foundation, caused by seepage or leakage of water from plumbing, heating, or air conditioning.
Seepage/Leakage - covers the deterioration, wet or dry rot caused by repeated or continuous seepage or leakage of water from within a plumbing, heating or air conditioning system or from within a household appliance, including the cost of tearing out and replacing that part of the dwelling structure necessary to repair the system or appliance.
Jewelry & other Valuable Items
Every home insurance policy is highly limited in how much coverage it provides for theft of jewelry and other valuable items (firearms, collections, antiques, silverware, china, etc..). In fact, the limit on many policies is as low as $1500. Our agents will guide you through your options to purchase more coverage so that your valuable items are properly insured – at a reasonable price. This is often referred to as “scheduling” property on your policy.
Other Common Endorsements
There are many other optional endorsements you can add to your policy to customize your coverage. We explain a few below. Please consult with your agent on any other optional endorsement to make sense to protect you and your family.
Covers the liability exposure for an approved animal up to the limit listed on the declaration pages.
Building Ordinance or Law Coverage
Increased limits are available to increase coverage for requirements to comply with any ordinance or law that regulates the construction, repair or demolition of the dwelling following a covered loss.
Extended Replacement Cost
increases the amount of total insurance on your house anywhere from 25%-100% although 25% is the most common. Very helpful in a total loss situation if there is a significant change in labor and material costs, which usually happens in a disaster.
Provides coverage for expenses, including help-line assistance and case management services, to assist a customer with the recovery of their identity following a covered ID Theft loss.
the amount of dwelling insurance is automatically increased pro rata annually to ensure the insured will not receive less than the replacement cost if there is a loss.
Provides coverage for loss assessments which result from a peril covered under the policy which are charged during the policy period against the insured by the association of property owners up to the limit of liability stated in the Policy Declarations.
Covers the liability arising out of false arrest, wrongful eviction or entry, invasion of the right of privacy in a room /dwelling, slander and defamation, or a violation of a person’s right to privacy.
Personal Property Replacement Cost
Pays the replacement or repair cost without any deduction for depreciation on the insured’s personal property.
Breakage of glass that is physically part of the dwelling or separate structure is covered as an extension of coverage.
Coverage A – Dwelling
This is the amount to rebuild your house in the event of a total loss (including the cost of cleaning up the leftover debris). It is different from the market value of the house. We use software called a replacement cost estimator to determine the appropriate amount to rebuild, so you can feel confident that you have enough insurance in the event of a disaster.
Coverage B - Other Structures
Typically 10% of the coverage A limit – other structures covers things on your property that not directly attached to the home. The most common are fences, storage sheds, detached garages, swimming pools and walk/driveways.
Coverage C – Personal Property
Typically 50-70% of the coverage A limit – personal property covers the items you would typically move in a moving truck – clothes, furniture, electronics, kitchen items, etc. It is important to purchase replacement cost coverage so that in the event of a loss you have enough coverage to purchase new items to replace those that was damaged.
Coverage D – Loss of Use
Typically 20% of the Coverage A limit – This coverage applies when your home is damaged to the point where you can no longer live in it and you need additional living expenses. As long as the initial loss is covered, this insurance will pay for living expenses while your home is being repaired or rebuilt.
Coverage E – Personal Liability
Accidents happen. Personal liability coverage insures that if those accidents happen on your property and you are to blame, you and your assets are protected. Examples include someone getting hurt on your property (bodily injury) or your tree falling on to your neighbor’s house during a storm (property damage). We recommend a minimum of $300,000, keeping in mind that this limit should always exceed coverage A. Umbrella policies are also available for extra liability protection at low costs.
Coverage F – Medical Payments to Others
Medical coverage insures that if someone is injured on your property, the injured party’s medical expenses are covered. It does not cover health care costs for you or any other members of your household. It is very inexpensive to purchase the maximum coverage amount here, typically $5,000.
In the event of a covered loss, your deductible is the portion of the cost of repairs that you are responsible for paying out of pocket. The insurance carrier will pay the covered amount above and beyond your deductible.
Deductibles vary from $500 all the way up to 2% of the dwelling’s reconstruction cost. It is important that you choose a deductible that you can afford to pay in the event of a loss. Consult with one of our licensed agents for advice on how to choose the right deductible for your house and budget.
Many ingredients can be thrown into a car insurance policy. Understand which coverages are necessary and most important to you.
Bodily Injury Liability Coverage
If you are responsible for an accident, bodily injury will cover any injury or death claims against you and all legal costs. If you have state minimum limits, your car insurance policy may run out and you will be forced to pay out of pocket.
Property Damage Liability Coverage
Covers claims for property damage caused by your car in an accident. Because liability coverage protects the other party, it is required in most states.
Pays for injury to yourself and anyone else in your car. This is optional insurance coverage in some states. In “no-fault” states, this coverage is called Personal Injury Protection (PIP). Medical Payments can save you from having to use your primary health insurance that usually contains a large deductible.
Uninsured/Underinsured motorist protection
Covers injuries to anyone in your car caused by uninsured or hit-and-run drivers. Under-Insured protection will cover claims you make against a driver with inadequate insurance. In some states, as many as 30% of drivers are uninsured.
Covers damage to your car up to full actual cash value at the time of loss. This car insurance coverage carries a deductible, which is the amount of the claim you have to pay out of pocket before the car insurance policy will pay out. In all insurance cases, the lower the deductible, the higher the premium. This is an optional coverage, but if you have a loan or are leasing the car, it is usually required by your finance company.
Covers damage to your car from theft, vandalism, fire, wind, flood, and other non-accident causes. Comprehensive also carriers a deductible and is optional, but if you have a loan or are leasing the car, it is usually required by your finance company.
Rental Coverage and Roadside Assistance
These are extra coverages and are usually very inexpensive to add to a car insurance policy. Rental coverage will pay for renting a car when your car is disabled due to a claim. Roadside Assistance (also called towing coverage) will pay to have your car towed incase of a breakdown.
Personal Property Coverage
This insurance coverage will pay to replace your personal belongings if they are lost, stolen, or destroyed as a result of an insured event.
Scheduled Personal Property
Talk to your agent about additional insurance coverage for your special belongings such as fine jewelry, art, or collectibles. Scheduling property can provide broader coverage for certain items.
Accidents happen. Personal liability coverage insures that if those accidents happen on your property and you are to blame, you and your assets are protected. Umbrella policies are also available for extra liability protection at low costs.
Medical coverage insures that if someone is injured on your property, the injured party’s medical expenses are covered. In some insurance cases, medical coverage can cover certain cases for people who are injured off your property. It does not cover health care costs for you or any other members of your household.
Additional Living Expenses
This insurance coverage applies when your home is damaged to the point where you can no longer live in it and you need additional living expenses. As long as the initial loss is covered, this insurance will pay for living expenses while your home is being repaired or rebuilt.