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I am more and more amazed that people only seem to care about price when it comes to their insurance. Don't get me wrong, I know how important price is when it comes to insurance and I am grateful I am a broker and can offer the products and pricing of many different insurance carriers to my clients; however, when someone calls in and asks for a quote without regard to what kind of coverage they are getting, I always scratch my head. Most people only seem to be concerned about the Coverage A part of their policy. Coverage A is the actual amount your home itself is insured for, in other words, the physical structure itself. People feel that if company ABC has me insured for $200,000 and company XYZ has me insured for $200,000 then I am insured the same at both places....WRONG!
Let me share with you 1 area where a home insurance policy can be vastly different and where you could find yourself in a world of hurt if you go with company ABC instead of XYZ; it has to do with how your Coverage C is handled. Coverage C is your personal property coverage or contents coverage. An easy way to think of contents is, if you turn the house upside down, everything that falls out is contents. This of course is a very loose definition of contents. Another way to look at it is, anything that is not permanently affixed to the dwelling is contents. Most home insurance policies (not all of them) will cover your dwelling or Coverage A for open perils. Open perils means your policy will cover your home for anything that happens unless it is specifically excluded in the exclusions section of your policy. This allows for a very broad range of things you are covered for. Coverage C on the other hand can be insured for either Named Perils or Open Perils. Not all carriers write coverage C the same. If you have Named Perils on your contents on your home policy, that means you are only insured for 16 very basic named perils. 16 is not very many. In other words, your policy will only cover your contents for the 16 named perils specified in your policy. Contrast that to Open Perils coverage.
What are the 16 named perils; let me share them with you. They are: Fire and Lightning, Windstorm and Hail, Explosion, Riot or Civil Commotion, Aircraft, Vehicles, Smoke, Vandalism and Malicious Mischief, Theft (subject to certain exclusions), Falling Objects, Weight of Ice, Snow, or Sleet, Accidental Discharge from Plumbing, Rupture of Hot Water Heater, Freezing of plumbing (subject to limitations), Artificially Generated Electrical Currents, and finally, Volcanic Eruption.
So if you have a loss to your contents, and you have a Named Perils policy, its only covered if it is one of those 16 specifically named perils. Think of the hundreds of ways you could have a loss to your contents that would fall outside of those 16 named perils.
So next time you are shopping for home owners insurance, take time to talk with a qualified insurance agent who can discuss these types of issues with you. I recommend you do business with a Certified Insurance Counselor. Only about 5% of agents have the CIC designation but using an agent who is a CIC will more likely assure you get better coverage on your policy. For questions please call Insurance Professionals of Arizona at 480-981-6338 or visit our website.
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