Frequently Asked Questions

• Do I really need insurance for my home?
• What exactly does my homeowners policy cover?
• What is my home protected against?
• Are flood, earthquake and other catastrophes covered?
• Are there any other exclusions I should know about?
• How much will I be paid for damage to my personal property?
• I work out of my home. Are my inventory and business property covered?
• I have lost everything! Where do I start?
• Is there anything I can do to lower my premiums?
• I own a condo. How is my policy different?

Do I really need insurance for my home?
For most people your home is your largest investment. Insurance is designed to protect your financial assets - your home and your household belongs. In the event of a fire, tornado or theft, homeowners insurance will help restore your home to the condition before the loss occurred. Homeowners insurance also provides liability protection against suits brought on for injury or damage caused by your or your family. Homeowners insurance is a requirement of mortgage lenders to ensure protection for the property used to secure the loan.

What exactly does my homeowners policy cover?
Exact is hard to define as there are different types of policies with many different options. You should discuss your personal needs with HPW Insurance Services to develop an insurance program that meets your specific needs. All homeowners policies have two basic components - property insurance and liability insurance. Property insurance covers your home, detached building and personal possessions when a covered loss occurs. Liability insurance protects you and your family against legal action by an outside party due to actions by you, your family or your property. This liability extends to medical payments to others for injuries caused by or occurring on your property.

What is my home protected against?
Again, there are many different policies with different options, but the homeowners insurance policy usually covers:

• Fire and lightning
• Windstorm or hail (unless specifically excluded)
• Explosions
• Riot or civil commotion
• Aircraft
• Vehicles
• Smoke
• Theft or vandalism
• Falling objects
• Weight of ice, snow or sleet
• Freezing plumbing, heating, air conditionings or other such household system as long as reasonable care has been taken to avoid this exposure.

It is important to read your homeowners policy and understand the excluded perils as well as the covered perils. Your HPW Insurance Services agent will be happy to review your policy with you.

Are flood, earthquake, and other catastrophes covered?
The standard homeowners policy does not cover flood or earthquake damage. Check with your HPW Insurance Services agent about special catastrophic policies for flood or earthquake. Flood and earthquake activity is widespread. Almost 90% of the US population lives in seismically active areas. Since 1900, earthquakes have caused damage in all 50 states. If your home is located in a flood-prone area, you are 26 times more likely to suffer a flood loss than a fire loss. Due to the flooding by Hurricane Floyd in 1999, many of North Carolina's flood maps have been redrawn. Many of the homes flooded that year were not considered to be in a flood-prone area.

Some of these exclusions can be covered by purchasing an endorsement to your policy. Please speak with your HPW Insurance Services agent to review your individual needs. There are also coverages that are limited in the amount that can be paid for a covered loss, such as theft of jewelry, silver or guns. This can be avoided by adding a Personal Articles endorsement to your policy. The "Ordinance or Law" exclusion or limit can be costly. Building codes change from time to time and the newer building codes may drive up the cost of rebuilding or repairing after a covered loss has occurred. For example, if the current building code requires a higher grade of electrical wiring and you have experienced a fire loss, your policy may cover only the cost of replacing the older wiring.

How much will I be paid for damage to my personal property?
Homeowners insurance is designed to cover general personal possessions, not valuable collections like antiques, jewelry, or original art. Most homeowners policies cover personal property on an actual cash value - replacement cost minus depreciation. A Personal Property Replacement Cost endorsement can be added to a homeowners policy to provide replacement cost coverage.

The homeowners policy lists specific monetary limits for some personal property in the "Special Limits" section. Those limits usually are:

• $200 for money, bank notes, bullion, gold and silver (other than goldware and silverware), platinum, coins, and medals
• $1,500 on securities, accounts, deeds, evidences of debt, letters of credit, notes (other than bank notes), manuscripts, passports, tickets and stamps
• $1,500 on all types of watercraft, including trailers, furnishings, equipment and outboard motors. However, wind or hail losses are not covered unless the watercraft is inside a fully enclosed building and theft coverage is restricted to on-premises only.
• $1,500 on trailers not used with watercraft. However, the theft coverage is restricted to on-premises only.
• $2,500 for property on the premises used primarily for business purposes and $500 for property away from the premises used primarily for business purposes.
• $1,500 for loss by theft of jewelry watches, furs, precious or semi-precious stones, but not exceeding $1,000 for any one article.
• 25% of Coverage C limit to a maximum of $10,000 for loss by theft of pewterware, plated goldware and silverware. 10% of Coverage C limit to a maximum of $10,000 for loss by theft of guns and related equipment.

Personal property in excess of the limits provided in the policy can be covered by purchasing a Scheduled Personal Property Endorsement. Please speak to your HPW Insurance Services agent for more information.

I work out of my home. Are my inventory and business property covered?
Yes, but within certain limits. Both are covered as personal property used for business purposes. However, there is a limit of $2,500 for property on the premises used primarily for business purposes and $500 for property away form the premises used primarily for business. Whether your home business is your primary business or a hobby that nets a few hundred dollars a year, it is still a business and should be covered as such. Reminder: your personal liability protection in your homeowners policy does not extend to business liability.

I have lost everything! Where do I start?
If you were to experience a catastrophic loss and lose everything, where would you start? Your insurance company would require a list of the items that were lost - in this case, everything you own! The time of a loss is not the best time to gather this information. We suggest preparing a home inventory that can be updated on a regular basis. It is much easier to perform an inventory while you have access to the items! When possible, list a serial number, date and cost of purchase. If you have the receipt, keep it with your inventory also. Here are three suggestions for performing an inventory of your home. Use one or a combination of the three and then keep a copy of the inventory off-site (ask a friend or family member to keep it, lock it in a safe deposit box or keep it at your office).

• Make a detailed list of all items in each room. Be sure to check cabinets, drawers and closets and include those items also.
• Video tape your home, room by room, taking special care to tape cabinets, drawers and closets
• Take pictures of your home room by room taking special care to capture cabinets, drawers and closets

With the stress of a major or total loss, the last thing you need to worry about is making a list of your belongings. Preparing a home inventory now could save you valuable time as well as expedite the settling of your claim. Click here to find out more about Home Inventories and download our form to help you complete yours.

Is there anything I can do to lower my premiums?
Although insurance prices are mandated by the state of North Carolina, there are measures you can take to lower your premium:

• Installing deadbolt locks, fire extinguishers, smoke alarms, and central station burglar and fire alarm systems can often earn you a discount on your policy
• Many insurers offer a discount if you insure both your home and your automobile with them
• Raising your deductible is another way to lower your premium. By assuming a larger deductible the companies risk is lessened and therefore the premium is lower.
• Please keep in mind that lowering your premium should not lower your coverage. Please call your HPW Insurance Services agent to discuss ways to lower your premium without losing coverage.

I own a condo. How is my policy different?
A condo policy covers many of the general areas as the homeowners policy. The main difference is there is limited coverage for the dwelling structure because this is usually covered by the general association. Your association policy will outline what you are responsible for covering. You should read these requirements carefully and discuss with your HPW Insurance Services agent coverages that meet your specific needs.