Your home is not only your safe haven and the place you retire to at night but also one of your biggest assets. Every home is different and has its own distinct and unique features; neighboring homes can be different, let alone homes in neighboring cities and counties. These unique features give the home character but also call for different types of coverage.
Whether it’s a house, condo or apartment you call “home,” here at Envision Insurance (located in Troy, Michigan) we have a team of highly trained, licensed insurance professionals ready to help with determining what coverage is most appropriate for your home.
Listed below is a brief explanation of Michigan homeowners, condo and renters insurance coverages to help you gain a better understanding of what your Michigan property insurance policy may cover. This list is not comprehensive and determining what coverage is right for your unique situation should be left to the experts, call us today with your questions on which coverage is most appropriate for you and ask us for a free quote!
What's covered by a standard homeowners insurance policy?
Physical Structures (Dwelling Coverage and Other Structures): If your house or other structures on your property, like a garage or tool shed, are damaged or a deemed total covered loss, the insurance carrier will arrange for them to be repaired or replaced.
Personal Property: If your personal possessions, like furniture, clothing, and appliances, are damaged or deemed a total covered loss, the insurance carrier will arrange for them to be repaired or replaced.
Liability and Medical Payments to Others: If someone is accidentally injured or has their own property damaged while on your premises, the insurance carrier will defend any claims against you and pay them up to your policy limits. They will also pay for reasonable and necessary medical expenses up to the limit you purchased, regardless of who was at fault. These are almost always two separate coverages, each with its own respective limit.
Additional Living Expenses / Loss of Use: The insurance carrier will cover your additional expenses if, due to a covered loss, you need to live elsewhere while repairs are being made to your home, enabling you to return to living your life as quickly as possible.
Some Add-On Protection & Coverage That You Should Consider:
Coverage for valuables (Scheduled Personal Property): This coverage covers theft, damage and loss of personal property that exceeds the insurance carrier’s standard limits (typically between $1,000 - $2,500 – depending on the type of personal property). By scheduling (itemizing) these special, often pricey, personal property items you ensure that they are covered by your policy whereas they would otherwise not be covered by standard personal property coverage.
Quick Guide: Insuring your valuables
Start with an appraisal
The best way to know how much coverage you need is to get your valuables professionally appraised. An appraisal will tell you how much your item is worth, and therefore, the cost of a replacement. Keep in mind, a receipt or bill of sale may suffice for jewelry and engagement rings.
Determine if you need extra coverage
If your valuable exceeds the standard amount, you might consider additional coverage. Generally, the standard amount for personal property is $1,000.
Items you should consider protecting:
Engagement rings & jewelry
Antiques & fine rugs
Collectibles & memorabilia
Water Backup & Sump Pump Overflow: Often, one of the most overlooked yet important coverages, Water Backup & Sump Pump Overflow
Inflation Guard / Protection: Although the median home purchase price rises and declines with the market, the cost of rebuilding a home does not. In fact, there are homes on the market that are selling for less than what it cost to build them.
If you insure your home for the price you purchased it for, instead of the cost to rebuild it, then you can leave yourself drastically under insured. Over time the value of your property will change due to inflation, which could leave a gap between your coverage and the rebuild cost of your home. That’s where inflation guard coverage comes in.
Inflation guard coverage is an optional endorsement that protects the rebuild cost of your home. It automatically increases the amount of insurance on your home a certain percentage each year to account for the disparity caused by inflation. It’s true that inflation will drive up market values, but an across-the-board increase in values may or may not affect your replacement cost, which is the determining factor insurance companies use to replace all or part of your home in case of accidents or natural disasters. Replacement cost may be higher or lower than market value or actual cash value, which could affect your bank account.
Condo insurance covers many of the same things that homeowners insurance covers (see Homeowners Insurance above). The major difference is that the dwelling coverage component of the condo policy typically covers the structure from the “studs in,” meaning the interior condo unit and not the exterior structure of the building; this is because the condominium owner typically maintains ownership of the interior (unit) of the structure but does not own the exterior portion of the structure. The outside structure is typically covered by the association’s Master Policy.
Granted most condominiums do not have other structures (such as detached garages and sheds) this coverage is typically not offered on a condo policy.
Condo insurance also typically covers Liability, Medical Payments to Others, Additional Living Expenses, Personal Property and Scheduled Personal Property (optional). For a review of these coverages read above – Homeowners Insurance.
Coverage That You Should Consider:
Loss assessment coverage is an optional add-on to your condo insurance policy that can help in the event of an accident in a shared area of the condo property, such as lobbies, stairwells, pools, outdoor spaces and more. Ordinarily, the condo association’s master policy provides coverage for incidents that occur in these shared areas; however, if the amount of the damages exceeds the master policy’s limits, the residents of the condo may end up having to contribute financially (whether they were involved or not). By adding loss assessment coverage to your condo insurance policy, you may be able to avoid paying out of pocket for these types of expenses.
Do I need loss assessment coverage?
Loss assessment coverage is not a required add-on to your condo policy. However, it can come in handy in the event of unexpected damages. Loss assessment claims could include personal liability incidents in shared areas, vandalism to the building’s exterior or property or even damage to the building’s shared interior spaces resulting from fire, certain natural disasters and more. These types of accidents could cost thousands of dollars to repair – and if the master policy’s limits are exceeded, the tenants are required to collectively pay the difference. Loss assessment coverage can protect you financially in the event of such an incident.
How much loss assessment coverage do I need?
The policy limits you select for your individual loss assessment coverage should depend on your HOA’s master policy limits. Talk to your HOA association about the master policy’s loss assessment limits before getting a condo insurance quote.
Renters do not own the structure in which they reside, for that reason a renters policy does not cover any part of the dwelling. Tenants renting either an apartment, condo or home can still be held liable for suits involving incidents occurring in the property / on the property premise. As such, liability coverage is a component of renters policies. Like homeowners or condo policies, renters policies also include Personal Property coverage. For a description of Personal Property coverage see the Homeowners section above.
Landlords, Second / Vacation Homes
Due to their uniqueness, we ask you to call us to gain a better understanding of what these policies cover.
Disclaimer: Please note, the information provided above is strictly for informational and educational purposes and should not be considered as legal and / or insurance counseling advice. If you have specific questions regarding a claim and / or lawsuit please seek proper legal counsel and representation. Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which are controlling. Such terms and availability may vary by state and exclusions may apply. Discounts may not be applied to all policy coverages.
“Homeowners Insurance.” “Liberty Mutual Insurance”. © 2019 Liberty Mutual Insurance. 175 Berkeley Street, Boston, MA 02116 | 36 USC 220506.
Retrieved from https://www.libertymutual.com/homeowners-insurance
“Loss Assessment Coverage”. “Nationwide Mutual Insurance Company”. © 2019 Nationwide Mutual Insurance Company.
Retrieved from https://www.nationwide.com/loss-assessment-coverage.jsp
“Personal Property Coverage”. “Liberty Mutual Insurance”. © 2019 Liberty Mutual Insurance. 175 Berkeley Street, Boston, MA 02116 | 36 USC 220506.
Retrieved from https://www.libertymutual.com/homeowners-insurance-coverage/property-replacement-service
“Understanding Inflation Guard Coverage For Your Home Owners Insurance”. “HomeInsurance.org”. © 2019 All Rights Reserved HomeInsurance.org.
Retrieved from http://www.homeinsurance.org/articles/understanding-inflation-guard-coverage-for-your-home-owners-insurance/
“What Does Home Insurance Cover?”. “Liberty Mutual Insurance”. © 2019 Liberty Mutual Insurance. 175 Berkeley Street, Boston, MA 02116 | 36 USC 220506.
Retrieved from https://www.libertymutual.com/homeowners-insurance-coverage