If your home carries a mortgage, Arizona requires you to have homeowner’s insurance. Before buying a policy, it pays to do your homework. Policies and coverage vary widely from provider to provider. Too often, people file a claim only to learn that their policy doesn’t cover their particular situation, or that coverage is less than they expected. Your insurance broker will work with you to review your options and make sure you get the coverage you need.
What Does Homeowner’s Insurance Usually Cover?
A standard home policy typically includes four basic types of coverage:
- Structural: The cost of rebuilding or repairing your home after it sustains damage or is destroyed entirely. Coverage depends on your policy but typically includes damage due to occurrences such as fire, lightning, and break-ins.
- Personal belongings: These are the clothes, furniture, electronics, and kitchen supplies in your home. If they are stolen or damaged in a covered disaster (as outlined in your policy), the insurer reimburses the cost of the items. Conduct an inventory of the items in your home and gather as many receipts as possible to determine the amount of personal belongings coverage you need. The average amount is around half of the cost of the home itself.
- Additional living expenses: These are the costs incurred when a covered disaster forces you out of your home, over and above your typical monthly expenses. This may include hotel and restaurant costs.
- Liability protection: Protects you in the event of a lawsuit, depending on the coverage levels chosen. Liability coverage may include bodily injuries sustained on your property, damage you or your family cause to another’s property, suits of libel or slander, and damage caused by pets.
Specific details of coverage and coverage amounts vary per policy.
What Additional Coverages Are Available?
You may choose additional coverage for your homeowner policy, including:
- Debris removal: A fixed amount provided toward the cost of removing debris left after a loss.
- Credit card: Many policies cover unauthorized credit card use up to $500.
- Mold: Some insurers offer limited coverage on losses related to mold.
- Identity theft: Some insurers cover losses related to identity theft, typically under your liability coverage.
What Damages Are Excluded from Most Homeowner Policies?
As always, check your policy or talk to your insurer for an accurate list of coverage and exclusions. However, common exclusions include:
- Loss of automobiles or pets
- Damage caused by flooding, an overflowing body of water, or surface water
- Water damage caused by a backed-up sewer or drain
- Nuclear hazard, war, earth movement, power failure damage, or neglect
- Damages to properties used for business purposes
- Wet and dry rot and fungi
- Some insurers do not cover mold damage
Most policies also post limits on certain types of personal property, including computers, antiques, artwork, jewelry, firearms, furs, cash, securities, and stamp and coin collections.
What Types of Homeowner’s Insurance Coverage Area Available in Arizona?
There are five basic coverage types:
- Actual cash value: Covers the value of the house and your personal possessions once depreciation has been subtracted. Basically, you get what the items are worth now, not what you originally paid for them.
- Replacement cost: This covers the actual cash value without depreciation being taken into account, so you can rebuild or repair your home up to its original value.
- Guaranteed replacement cost: This guarantees that the insurer pays for the cost of rebuilding your home even if the payout exceeds the policy limit.
- Extended replacement: Some insurers offer a level of coverage that has a maximum payout of 125 percent of your property’s insured value.
- Inflation guarantee: This is an extra feature that ensures the insured value of your property stays current with the marketplace.
Does My Homeowner Policy Cover Accidents that Occur Outside the Home?
If the accident does not involve an automobile, your policy may cover it, including sporting injuries and those sustained by another person.
Does My Homeowner Policy Cover My Pets?
Most homeowner policies cover injuries caused by your pet as part of your liability protection. It may also cover these injuries when you and your pet are away from home, such as if your dog bites someone while taking a walk.
Do Homeowner Policies Cover Criminal Acts?
Some policies cover crimes committed against you or your family, such as theft and vandalism. It may also cover some of the legal costs if you are a victim of identity theft, or even the cost of a vandalized headstone, if you or someone in your household is that marker’s primary caretaker.
Does My Homeowner’s Insurance Cover Improvements Required by Building Code Changes?
When localities implement new laws or building codes, some homeowners may have to make changes or improvements to their property. Many policies cover these eventualities.
What Sorts of Disasters Do Homeowner Policies Cover?
Coverage, again, varies by policy and provider. In addition to fire and lightning, your policy may cover a variety of strange accidents and disasters. This includes:
- Falling debris, such as meteorites, satellites, and airplane parts
- Looting or damage to your home or outbuildings sustained during a riot
- If the fire department sends you a bill after showing up to your home
- Damage and destruction caused by volcanic eruptions
- If a power outage destroys your freezer or refrigerator, you may be able to claim up to $500 for spoiled food
Does Arizona Require a Grace Period for Homeowner’s Insurance?
No. The decision whether to allow a grace period varies by provider. A grace period is the time after your policy lapses during which you still have coverage.
How Do Insurers Determine My Premium?
A wide variety of factors influence the amount of your homeowner’s insurance premium. First, of course, is the coverage you choose. Determining this amount requires understanding your home’s market value, completing an inventory of all personal items, and choosing the liability coverage levels you prefer. Insurers also look at your zip code, as the crime rate helps determine costs, with high-crime areas determined to carry a higher insurance risk. Insurers also look at your credit score, how close your home is to a fire hydrant, the claims history of the property in question, and the condition of the home, particularly its heating, electrical, and plumbing systems.
How Can I Save Money on My Insurance Premium?
The quickest path to a lower premium is raising your deductible (the amount you pay out of pocket before the insurer pays the remaining damages). Boosting your credit score also leads to a lower premium. In addition, many insurers offer discounts if you install certain safety features, such as smoke detectors, sprinkler systems, burglar alarms, and proximity lighting. Fitting windows and doors with locks and deadbolts also help keep it secure, while keeping the walkways free of debris helps guard against slip and fall accidents (and the resultant liability claims). You can also receive lower premiums when you buy coverage through an employer, trade union, or other association membership.
How Much Does Quality Arizona Homeowner’s Insurance Coverage Cost?
Costs vary widely depending on coverage and provider, but the average Arizonan spends $800 per year on homeowner’s insurance, according to the National Association of Insurance Commissioners.
How Much Home Insurance Coverage Do I Have on My Valuables?
Most home insurance providers offer coverage for up to 75 percent of your home’s structure, or $75,000 for every $100,000 of structural coverage, but the number varies by provider. The amount needed depends on your requirements, though. If your personal belongings do not add up to 75 percent of your home’s value, there’s no sense in carrying that much insurance. You will only be reimbursed for actual losses, not the maximum amount of your policy.
What Does the Term “Dwelling” Mean?
No matter how the dictionary defines the word dwelling, the only definition that matters for your homeowner’s policy is the one offered by your insurance provider. Standard policies define dwelling as your home and any attached structures. The word “attached” is the key component. Most policies include coverage for an attached garage, front and back porches, and a deck.
Typically, sheds, detached garages, and guesthouses are not covered by dwelling insurance, as they are not connected to your home. To cover these, talk to your insurance broker about “other structures” insurance policies.