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Assessing Your Home Insurance Coverage

By Mike Barrett

Tell us a little bit about your company and its foundation.

My father Richard P. Barrett purchased the agency from previous agent Nathan Morrill in 1989. He is going on his 25th year in the business. My wife and I joined the agency in 2007, after my mother succumbed to a recurrence of ovarian cancer. We strive to maintain an "extension of family" like relationship with all of our clients.

Please briefly explain the idea of home insurance to our readers, what it is, why it was created, etc

Homeowners Insurance was created to prevent individuals from financial turmoil when losses occur to property they own. By property I mean both personal belongings and the home they reside in. Homeowners Insurance is available as a Tenant Homeowner policy to protect those who do not own the property they reside, but do have personal belongings to protect, while the more traditional Homeowner policy is intended for the person that owns their home. The purpose of this policy (traditional one of course) is to indemnify at the time of loss, which is why these policies are based on a replacement cost for the structure. If your home was to burn to the ground, what would be necessary to build it back with like kind and quality; additionally what would be necessary to replace your personal belongings with like kind and quality.

What are some of the advantages of working with a local agent, rather than a popular online insurance source?

Local knowledge just trumps all other options. When we write a policy we have taken the time to review the property, identify risks, and work with the insured to find them coverage that best suits their needs and budget. Additionally we are qualifying them for a policy with a company that we know will accept the exposure. Companies like to inspect properties in many cases after they are in place, and many times exposures may be identified that prompt that particular insurance carrier to set the policy up for cancellation as a result. Improper wood stove installations, wiring, old roofing, location from fire protection, all these things can be discovered by a carrier after a policy is in place causing headache. Our job is to place you with the appropriate carrier the first time.

What is the deductible and how does the insurer decide on the amount?

The deductible is an opportunity for crediting. Many carriers have a minimum deductible of $250, some only go as low as $500. The deductible is completely the choice of the consumer, as it is an opportunity to save on the insurance premium by choosing a higher deductible. Deductibles can be as high as $5000 to $10,000 depending on the desires of the individual purchasing the policy. Should a loss occur it is then subject to the deductible, if it is less than the deductible you chose, then there is no claim to file. When claims exceed the deductible (ex: $50,000 loss with $500 deductible), the carrier would pay you up to $49,500, while you absorb the deductible.

Do most property protection policies include dwelling, other structures, and personal property?

We often refer to Homeowner policies as "package policies", meaning once you have a limit of coverage for the home, you automatically get limits of coverage for other structures, personal property, and loss of use. The most common breakdown is 10% of the dwelling limit for other structures, 70% of the dwelling limit for personal property, and 20% for loss of use. While these can vary the ones mentioned are most common. What if you have a $150,000 home and a $30,000 garage? There are endorsements that allow us to increase the coverage, as we know that $15,000 (10%) would not be enough for the garage.

What does the personal liability part of my policy cover? Will the insurer pay for medical expenses as well?

An often overlooked coverage provided by Homeowner policies is Liability. The limit of Liability you choose ($100,000, $300,000, $500,000, $1,000,000), is your first level of protection should your negligence have caused bodily injury or property damage to others. While subject to exclusions (i.e. auto liability, etc.), it is this protection that could prevent you from financial turmoil should you cause injury. The cliché example is hitting someone with a golf ball with a bad tee off; you have now caused injury to another, and are therefore liable for their injuries, and the cost, up to the limit of coverage you have. Liability and Medical Payments to Others also protect you if someone was to become injured while at your place of residence. I must stress that injuries caused by motor vehicles (cars, motorcycles, atv's, etc.), are excluded types of loss on the Homeowner policy, which is why you must purchase a separate policy for those exposures.

What's the best way for people to get in contact with you and your company?

We are easy to find online, Barrett Insurance Agency www.thebarrettagency.com., located in St. Johnsbury, VT.

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About The Author

In 2007 Michael "Mike" Barrett joined the family business after 12 years in radio,...

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