Missouri Homeowners Insurance Guide

HomeownersInsuranceyourProtecthomeWhy you may need homeowners insuranceWhat it coversHow to read a policyWorksheets for shoppingHow to protect against a lawsuitHow the value of your belongings is calculatedDIFPJay NixonGovernorDepartment of Insurance,Financial Institutions &Professional RegistrationJohn M. HuffDirector

InsideyourProtecthome3 Your home is valuable to you. But what if 4 Homeowners basics5 What’s not covered by homeowners insurance6 Shop around: Target your coverage7 Don’t be shy: Questions to ask when shoppingfor insurance8 Understanding your declarations page9 Replacing your belongings:actual cash value vs. replacement cost10 Preparing a home inventory11 Protecting against lawsuitsNeed help? Contact us:800-726-7390 or Scan theQR codeinsurance.mo.gov2Homeowners Insurance

Your home is valuable to you.But what if Your home is damaged by a fire or storm? Your home is robbed? A guest is injured in your home?Do you have the funds to rebuild or replace everything that was damagedor stolen? Insurance can protect you from such unpredictable events.Buying homeowners insuranceThe Missouri Department of Insurancehas tools on its website to help you: Search for companies that sellhomeowners insurance in your area. Review frequently asked questionsabout homeowners insurance. Search for a licensed agent oragency near you. Review consumer complainthistory for insurance companies.Review coverageReview yourpolicy annuallytomake sure you haveenough coverage.You don’t want tobe underinsured ifdisaster strikes.Log on to insurance.mo.gov to find out moreinsurance.mo.gov3

Homeowners basicsHomeowners insurance protects you from the unexpected burden ofpaying to rebuild your home should disaster strike. It also helps pay: Cost of personal property ifit’s damaged or stolen. Additional living expenses –such as a hotel – while yourhome is being rebuilt. Medical bills, up to a limit, if aguest is injured on your property.ABC sTHEOF HOMEOWNERS INSURANCECompare prices of homeowners insurance fromdifferent insurance companies every two years.HOMEOWNERS INSURANCEWhat is covered: Fire & smoke Windstorm & hail Lightning Vandalism & theft Weight of ice, snow or sleet Damage from carCan’t find a companyto insure you?Contact the Missouri Fair Plan:800-392-7240 ormissourifairplan.comThe Missouri legislaturecreated the program to provideinsurance to property ownersunable to find coverage fromprivate insurance companies.4What is not covered: Flood Earthquake Sewer & drain backup Normal wear & tear Cars parked on yourpropertySpeakupTake time to go over thedetails of your policywith your agent. Ifyou think youneed morecoverage,tell your agent.Homeowners Insurance

What’s not coveredby homeowners insuranceThe right homeowners insurancecoverage can bring peace ofmind. However, there are a fewthings that do not fall under thestandard policy, including: Flood damage Earthquake damageYou will need a separate policy tocover this type of damage.Add it onIf you own expensive items or have a sump pumpin your home, you may need extra coverage onyour policy to ensure that your home is betterprotected. Here is coverage (called a rider orendorsement) you can add to your homeownerspolicy:Sewer and drain backupThis covers damage caused by water backup fromdrains, sewers or sump pumps.Jewelry, antiques, firearmsExpensive items need additional coverage. Youmay want to get them appraised for their value.Home-based businessIf you have a home business, this ensures yourbusiness items are better protected.Checktit ouParentsof collegestudents:If your childlives oncampus,yourhomeownerspolicy maycover hisor herbelongings.You will be responsible for the policy deductible if you have aclaim. A higher deductible can save you money on premiums.insurance.mo.gov5

GET THE BEST PRICEShop around:Target your coverageMissouri has a highly competitive insurance market. Use thisworksheet to compare offers from insurance companies.Homeowners policycoverage amountppFill in company name (above) & cost (below) to compare policiesqqDwelling limits Personal property limits Liability protection(each occurrence) Guest medical (per person) Damage to property of others pqOptional coverage (ask your agent)Replacement coverage Sewer and drain backup Jewelry and firearms Art, collectibles and antiques Flood Earthquake Personal umbrella Annual premium Deductible Additional policies6Homeowners Insurance

WORKSHEETDon’t be shy:Ask your insurance agentabout your coverage options.Can you review the differenthomeowners policies?Which one is right for me?Whatdoes thispolicycover?Whatisnotcovered?Do I have enough insurance to rebuild my home?If my home is damaged by fire, will it berebuilt the way it was before the damage occurred?Does this policy give me replacementcost or actual cash value coverage?Will my coverage limits increase over timeor will I have to adjust them periodically?Does this policy cover water damage, includingdamage from sewer, drain or sump pump backup?Do I need flood and earthquake insurance? What is the cost?Do I have enough coverage to replace all of my belongings?How much willmy premium be?How much can I save byincreasing my deductible?What discounts are available?Are there any improvements Ican make to lower my premium?How do I file a claim?insurance.mo.gov7

Understanding yourdeclarations pagePolicy period:12 When coverageA declarations pageprovides specificpolicy details.Know how to readthis page to betterunderstand yourcoverage.Deductible: What3 you must pay ifbegins & endsyou have a claimPolicylimits:ThePolicy numberXX-XXXXXX-XXmost Your Insurance irationdate:you2 12 months May 1, 2012May 1, 2013will be Company Town, USA 54321paidHomeowners Policy SAMPLE forclaim Automatic renewal: If policy period is shown as 12 months, this policy will berenewed automatically subject to premiums, rules and forms in effect for eachsucceeding policy period. If policy is terminated, we will give you and Mortgagee/Lienholder written notice in compliance with policy provisions or as required by law.Coverages & propertyABCLM1LiabilitylimitsSECTION IDwelling 250,000Dwelling extension (garage) 30,000Personal property 150,000Actual loss sustainedLoss of useSECTION IIPersonal liability (each occurrence) 300,000Damage to property of others 1,000Medical payments to others 2,000(each person)Forms, options and endorsementsHomeowners policyHomeowners policy endorsementEarthquake excl. masonry veneerSewer, water backup 10,000/ 500 deduc.Increase dwelling up to 50,000Jewelry and furs 2,000 eachDeductibles – Section IEarthquakeOther losses6XX-XXXXXX-XXXXXX-XXXXXX-XXXXOption XXOption YY310% 500In case of loss under this policy,the deductible will be applied peroccurrence and will be deductedfrom the amount of loss. Otherdeductibles may apply – refer toyour policy.Policy premiumLoss of settlement provisions (see policy)A1: Replacement cost – Similar constructionB1: Limited replacement cost – Coverage BInflation coverage index XXX.XEarthquakepremium4 1,000(included)Discounts appliedHome/AutoHome protection (burglar and firealarms, smoke detectors)Claim record/Customer longevityAge of customer5Your policy consists of this page, any endorsements and the policy form. Keep together.Extra coverage: Can beadded for more protection865Discounts: Number ofdiscounts applied to policyTotal premium: Yourcost for policy periodHomeowners Insurance4

Replacing your belongingsActual cash valuevs. Replacement costThe amount needed to repair orreplace your belongings, minusdepreciation. Depreciationis the decrease in value ofproperty because of age or use.The amount needed toreplace an item at today’sprice.Will the insurance company always pay the personalproperty limit shown on your policy?No. The policy limit is the most the company will pay.HOUSEHOLDBELONGINGSACV vs. Replacement cost(Most companies follow this formula)How replacement cost works: An insurance company will firstpay you the ACV of an item. Once the item is replaced and receiptsubmitted, the company will then settle up with you.Actualcash value 640Television(1 year old) 1,120Depreciation 160(20%) 1,680(60%)Replacementcost 800 2,800Leather couch(10 years old)Replacement cost coveragemay increase your premium.insurance.mo.gov9

Preparing a home inventoryA home inventory is a list of all your belongings – from socks tocomputers to furniture. If your personal property is damaged or stolen,having an inventory makes filing a claim with your insurance companymuch easier – you may even get a larger payment because your list willbe more comprehensive.Check it off: Tips to make your home inventory more useful Record specific details such as the serial numbers forelectronic items and appliances. Photograph or videotape valuable items and attach them to yourchecklist. Update your inventory annually and when you make large purchases.Download an inventoryThe department’s website offers three options:Our bookOrder or downloadfrom our website.iPhoneAndroidScan the QR codes to downloada home inventory app on yoursmartphone. Or go to Apple’sApp Store or Google Play Store.Lock it downKeep your home inventory in a safe, fire-proof box,or store it at the home of a family member or friend.For electronic versions, email them to yourself.Check with us to make sureyour agent is licensed in Missouri.10Homeowners Insurance

Protecting against lawsuitsAccidents happenHomeowners insurance givesyou the protection you need incase someone is injured on yourproperty.It also protects you from: Lawsuits against you or yourfamily members. Damage or injury your petscause to others.Protect everything else, even while away from homeHomeowners insurancecovers your possessionseven if they are damaged orstolen while off site – suchas in a car.Contact us For more information on othertypes of insurance, including: Auto Life Health BusinessTalk to your agent about increasingyour liability limits for more protection.insurance.mo.gov11

InsuranceConsumerHOTLINEIf you have questions about your insurance policy,to file a complaint or to verify the license of aninsurance company or agent, contact us:800-726-7390insurance.mo.govDIFPDepartment of Insurance,Financial Institutions &Professional RegistrationREVISED APRIL 2012

4 Homeowners Insurance Homeowners basics Homeowners insurance protects you from the unexpected burden of paying to rebuild your home should disaster strike. It also helps pay: Speak up Take time to go over the details of your policy with your agent. If you think you need more coverage, tell your agent. Compare prices of homeowners insurance from