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Are You Properly Covered?... Real Life Scenarios

When summer comes, most people want to ease up on their work schedule, go on vacation or enjoy the fine weather. Thinking about homeowners insurance is probably not high on their list of priorities. But the summer is when people often travel and leave their homes unattended, exposing themselves to risk. Having the right insurance coverage can help you relax this summer, not to mention saving you hundreds or even thousands of dollars should disaster strike.

Here are some real-life scenarios, describing the impacts of having the right - and the wrong - insurance coverage. Each example is based upon typical homeowners or renters coverage.

Rental Apartment is Robbed
A young couple leaves their apartment to spend a beautiful summer day at their apartment complex's pool. However, in their enthusiasm, they forget to lock their front door. They return a few hours later, shocked to find that that their television, stereo and some cash is missing. The cost to replace the stolen property is $2,500.

  • With Renters Insurance, their out-of-pocket cost would be $250 (This is their deductible)
  • Out-of-pocket cost to couple without Renters Insurance: $2,500
  • Annual Premium for Renters Insurance: $150

Learn more about Renters Insurance Coverage.

Jewelry Stolen From Hotel Room
Mr. & Mrs. Smith, who are staying at a lovely coastal resort, leave their hotel room to spend a day at the beach. When they return to their hotel room later that day, they discover that the diamond bracelet Mr. Smith had given to his wife for their tenth anniversary is gone.

Mr. Smith calls their insurance company to report the theft, and he is relieved to learn that the loss is covered. However, the Smith's policy contains certain liability limits for jewelry. To cover the full replacement cost of the bracelet, Mr. Smith should have purchased a scheduled Personal Property Endorsement to increase the liability limit on jewelry before the theft.

The cost to replace the bracelet is $5000.

  • Recovery amount to the Smiths without the Personal Property Endorsement: $1,000
  • Recovery amount to the Smiths with the Personal Property Endorsement: $5,000
  • Annual premium for Personal Property Endorsement (with Homeowners Policy): $25
  • The Scheduled Personal Property Endorsement provides coverage for loss or theft and no deductible applies to claims under this coverage.

Learn more about Personal Property Endorsements.

Hurricane Destroys New Home
Mrs. Wilson purchase a home in the Gulf Coast area of Florida, a hurricane destroys their new residence. An insurance adjuster visits their home and determines that the house will cost $150,000 to rebuild. In addition, it is determined that $100,000 of personal property is lost.

The Wilsons ask when they can start rebuilding their home and replacing their personal property. The adjuster advises them that their insurance policy valued the replacement cost of their home at $125,000 and their contents at $75,000. If the Wilsons had the proper valuation on their home and contents, the loss would have been covered in full.

  • Coverage on the Wilson's home: $125,000
  • Coverage on the Wilson's personal property: $75,000
  • Out-of-pocket expense to the Wilsons for the house: $25,000
  • Out-of-pocket expense to the Wilsons for the personal property: $25,000
  • Increase in homeowners insurance annual premium to increase coverage: Approximately $50

Learn more about increased coverage for personal property.

Hailstorm Damages Roof
Mr. Peterson is reading in his den when he notices that the heavy rain from a summer storm has turned into hail. The next day he observes hail damage to his roof and calls his insurance company. The insurance adjuster arrives and determines that the composition shingle roof must be completely replaced for a total cost of $8,000. The adjuster applies the depreciation for the roof's age (ten years), which reduces coverage by 25% to $6,000. If Mr. Peterson had purchased a "replacement cost endorsement" to his homeowners policy, the roof would have been completely covered.

  • Out-of-pocket cost to Mr. Peterson: $2,000
  • Increase in homeowners insurance annual premium for endorsement: Less than $50

Learn more about replacement cost endorsements.

Boy Injured at Family Pool Party
The Decker family is hosting a large family pool party on the Fourth of July. Tragedy strikes when Thomas, their twelve-year-old nephew, falls off the diving board. Seriously injured, the young boy is taken to the hospital. Quickly, the hospital bills hits $3,000, but Thomas' parents have no health insurance.

Fortunately, the Deckers realize that the medical payments portion of their homeowners policy covers medical bills of individuals injured on their property, regardless of fault. Thomas recovers quickly, everyone breathes a huge sigh of relief, and Thomas' family is saved from a large medical bill.

  • Annual premium for Decker Family's homeowners insurance: $300.
  • Medical payments paid by insurance company: $3,000.

Learn more about medical payments coverage in our homeowners policies.

Neighbor Sues Neighbor for Dog Bite
The Bodden children are playing in their backyard when one of them throws a ball over the fence into the Pagano's yard. One of the Bodden children climbs over the fence and unknowingly steps on Cosmo, the Pagano's dog. The startled dog snaps and bites the child.

Outraged,the Boddens file suit against the Paganos and win their case. Fortunately, the Paganos have medical and liability insurance provided by their homeowners policy to protect them.

  • Litigation cost to defend the suit: $10,000.
  • Medical bills: $2,500.
  • Pain and suffering damages: $100,000.
  • Total cost paid by Pagano's insurance company: $112,500.
  • Total cost paid out-of-pocket by Paganos: $0

Learn more about medical and liability expenses coverage.

Insurance can be a complex product to buy--but it doesn't have to be. Knowing your risks and understanding your coverage is the key to purchasing the right homeowners policy for you. Coverages between policies often vary, so buying on price alone may not provide you with enough insurance to meet your needs. Make sure that you understand exactly how protected you are before you buy. Protect yourself before the summer starts.


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*21st Century is not affiliated with Homesite Insurance. The 21st Century Homeowners Insurance Program is underwritten by member companies of the Homesite Insurance group, a leading provider of homeowners, renters and condominium insurance. Member companies include: Homesite Insurance Company, Homesite Indemnity Company, Homesite Insurance Company of California, Homesite Insurance Company of Florida, Homesite Insurance Company of Illinois, Homesite Insurance Company of the Midwest, Homesite Insurance Company of New York, Homesite Insurance Company of Pennsylvania, and Homesite Lloyd's of Texas.
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