Peril Based Coverage

Charles Goodman Group: Trustworthy Insurance Agents in Chappaqua

The importance of purchasing homeowners insurance cannot be overstated. Failure to do so can leave a homeowner facing thousands of dollars in liability and force them to file for bankruptcy. Not having proper insurance coverage can be just as dangerous as having no insurance coverage at all. A discussion with a Chappaqua insurance agent can clear up any questions a homeowner may have about their insurance coverage.

Peril is a term that is used to describe the cause of the damage a home sustains. Fire, vandalism, theft and floods are all types of perils. Insurance deals with perils in two different ways. There are open coverage and named perils coverage.

With named peril coverage, a list is provided that names exactly what type of damage is covered. The homeowner is liable for any damage that is caused by perils not listed in the policy. Open peril policies will cover damages of any sort with the exception of perils that are excluded from coverage.

Most homeowners insurance policies come as a package policy that is designed to cover multiple, but not all perils. For example, a homeowner’s policy may state that it will cover for fire, lightning and theft. A consumer will have to purchase extended coverage if they want things like civil commotion, earthquake or fire and sprinkler damage covered. It is extremely important for homeowners to examine their insurance policy in a meticulous way. They should make a list of all of the perils that are covered as well as those that are not. Then, based on this information, they can decide if it will be necessary for them to purchase extended coverage.

The insurance agent experts at the Charles Goodman Group of Chappaqua can assist you with any questions regarding property insurance or life insurance.

How much coverage is enough coverage? The answer to that question is going to depend on many circumstances. One factor is the amount of money a homeowner is willing to pay out-of-pocket to replace lost items as opposed to the amount of money that they are willing to pay on a monthly basis for their insurance premium. Some policies will cover replacement cost coverage. This means that the homeowner will be able to replace whatever they lost up to the limits stipulated in the policy without paying any money out of pocket. These policies are more expensive. However, when a homeowner files a claim, they have limited or no out-of-pocket expense.

Actual cash value reimbursement will repay a homeowner for the value of the items that they lost minus depreciation. A policy of this sort may be less expensive, but when the homeowner files a claim, it is likely that in addition to the money they receive from the insurance company, they will need to use personal funds in order to replace the items that were destroyed. Some homeowners who are concerned about additional coverage have chosen to purchase a personal article floater to cover expensive items such as antiques or jewelry.

It is not easy to understand a homeowner’s insurance policy. However, it is well worth it for a homeowner to take the time to review their policy to make sure they have the coverage they need.