Homeowners Insurance

Homeowners Insurance

How much homeowners coverage does your family really need? At a minimum, your policy should protect against these four exposures:

• The physical structure of your house.
• Your furniture, clothing, electronics, and other personal belongings.
• Additional living costs if damage forces you out of your home while repairs are underway.
• Your liability when someone is injured on your property.

Your policy limit should reflect what it would actually cost to rebuild your home at today's construction prices in the Piedmont region. Leave out the land value entirely, and do not simply use your purchase price as a guide. Rebuilding costs in areas like Concord, Burlington, or Greenville SC may be higher or lower than what you originally paid.

Some lenders tie the insurance requirement to your mortgage balance. If that is your situation, double-check that the coverage amount is still enough to rebuild. And if you have paid off your mortgage, do not drop your homeowners policy. It still protects your single largest investment.

What drives the cost to rebuild your home:

• Construction costs in your local market
• The year your home was originally built
• Total square footage
• Exterior wall type, whether frame, brick, stone, or veneer
• Architectural style, such as ranch or colonial
• Number of bedrooms, bathrooms, and specialty rooms
• Roofing materials and design
• Detached structures like garages, workshops, and storage buildings
• Fireplaces, custom finishes, and decorative details
• Any rooms that were custom-built or significantly remodeled
• Improvements you have made over time, such as kitchen expansions, bathroom additions, or finished basements

A standard homeowners policy covers common perils like fire, lightning, hail, explosions, and theft. It does not cover flood damage, earthquakes, or deterioration from neglected upkeep.

Replacement Cost Policies

The majority of homeowners policies reimburse you for the full replacement cost of structural damage. That means the insurer pays to repair or rebuild using comparable materials and quality, with no reduction for depreciation or wear and tear.

If you carry a separate flood insurance policy, structural coverage under that plan can also be written on a replacement cost basis.

Guaranteed or Extended Replacement Cost Coverage

After a severe tornado or major storm in the Piedmont, demand for building materials and skilled labor can spike dramatically. That surge often pushes rebuilding costs well above your policy limits. To guard against that shortfall, you have two upgraded options.

An extended replacement cost policy pays 20 percent or more above your stated limits, depending on the carrier. A guaranteed replacement cost policy covers whatever it takes to restore your home to its pre-loss condition, no cap.

Building Codes

Building standards evolve over the years, and codes may look very different now than when your home was first constructed. If your house sustains major damage, local authorities may require the rebuild to comply with current codes. Standard homeowners policies, even guaranteed replacement cost versions, typically do not cover the added expense. An Ordinance or Law endorsement can be added to your policy to address those costs. An endorsement is simply an add-on form that adjusts what your policy covers.

Inflation Guard

An inflation guard clause is a smart addition to any homeowners policy. It automatically adjusts your dwelling coverage limit at each renewal to keep pace with local construction costs in the Charlotte metro, Triad area, or wherever your home sits.

Older Homes

Owners of historic or older homes in the Piedmont may find that a standard replacement cost policy is not available. In that case, a modified replacement cost policy can fill the gap. Instead of replicating original features like plaster walls, hardwood floors, and ornamental moldings with identical materials, the insurer will pay for repairs using modern construction methods and materials.

Practices vary widely among carriers. Some refuse to write replacement cost policies for older properties because reproducing period details is so expensive. Others will insure these homes at full replacement cost as long as the property is well maintained.

If replacement cost coverage is unavailable or the price is prohibitive, make sure your policy limits are high enough to provide a home of reasonable size and quality after a loss.

Your Personal Possessions

Most homeowners policies provide personal property coverage equal to roughly 50 to 70 percent of the dwelling coverage amount. You can find these limits on your Declarations Page under Section I, Coverages, A. Dwelling.

The only way to know whether those limits are adequate is to complete a thorough home inventory. Document everything you own along with what it would cost to replace each item if it were stolen or destroyed. If the standard limits fall short, ask your agent about increasing your personal property coverage.

Replacement Cost or Actual Cash Value

You have two choices for insuring your belongings: actual cash value or replacement cost.

Actual cash value pays what your item is worth today after accounting for age and depreciation. Replacement cost reimburses you for a brand-new equivalent, regardless of how old the original was.

Consider a practical example. A fire destroys the television you bought a decade ago. With replacement cost coverage, the insurer buys you a comparable new set. With actual cash value, you receive only a fraction of that amount because the old set had lost most of its value over ten years. Some replacement cost policies will even deliver the new item directly to you.

Replacement cost coverage typically adds about 10 percent to your premium compared to actual cash value. Flood insurance for personal belongings, if needed, is available only on an actual cash value basis.

Insuring Expensive Items with Floaters/Endorsements

Standard policies cap payouts on certain high-value categories. Jewelry is commonly limited to $1,000 to $2,000. Check your policy under Section I, Personal Property, Special Limits of Liability for specifics. Computers may also carry separate limits.

When those caps leave you underprotected, a personal property floater or scheduled endorsement lets you insure individual pieces or entire collections at their appraised value. These add-ons carry no deductible. Your premium is based on the item's nature, your location in the inland Carolinas, and its dollar value.

To establish value, provide your agent with a current receipt or a professional appraisal.

Additional Living Expenses After a Disaster

This is one of the most valuable features in a homeowners policy. If a covered event like a fire, severe storm, or tornado makes your home uninhabitable, this coverage pays for temporary housing, restaurant meals, and other day-to-day costs you would not normally incur.

The amount varies by carrier. Many policies set additional living expense coverage at around 20 percent of your dwelling limit. Some companies offer policies with unlimited loss-of-use benefits for a defined period.

If you rent out a portion of your property, this coverage also compensates you for lost rental income during the time your home cannot be occupied.

Talk with your Cornerstone Insurance agent to clarify exactly how much coverage you carry, how long it lasts, and whether increasing it would be worthwhile.

Liability to Others

Your homeowners policy includes personal liability protection. This covers you and your family members against lawsuits for bodily injury or property damage to third parties. Damage caused by your pets is included as well. The policy pays both your legal defense costs and any court-ordered damages.

Standard policies typically start at $100,000 in liability coverage, but higher limits are available. Most insurance professionals now recommend carrying at least $300,000 to $500,000 in liability protection.

Umbrella or Excess Liability

Your liability coverage should match your exposure. If the value of your property, investments, and savings exceeds your homeowners policy limits, an umbrella or excess liability policy can bridge the gap.

These policies kick in after the underlying liability on your homeowners or auto policy is exhausted. An umbrella policy is a separate purchase, not a rider on your homeowners coverage. Beyond higher dollar limits, umbrella policies also broaden the scope of what is covered. They protect against libel, slander, and invasion of privacy, none of which are included in standard homeowners or auto policies.

Pricing depends on your underlying coverage amounts and your overall risk profile. Higher underlying limits mean a cheaper umbrella policy because the chance of ever tapping into it decreases. Most carriers require a minimum of $300,000 in liability on both your home and auto policies before they will write an umbrella.

a) Primary Home (Newer Constructions)

b) Secondary Home

c) Condominium

d) Renters

You do not need to own a home to have property worth protecting. Fires, break-ins, and lawsuits can hit renters just as hard as homeowners.

Most property owners carry insurance, but a surprising number of renters go without it. Nobody requires you to buy renters insurance, so many people skip it. That is a risk you do not have to take.

A renters policy typically covers losses from:

• Theft
• Vandalism
• Sudden and accidental smoke damage
• Unexpected discharge of water or steam from plumbing, HVAC systems, or appliances
• Fire or lightning
• Windstorm or hail
• Loss of use

Whether you rent a house, apartment, or manufactured home in the Piedmont or Upstate SC, our plans can protect your belongings and the structures adjacent to where you live.

e) Flood

Homeowners insurance is central to safeguarding your personal assets. Contact Cornerstone Insurance today to make sure your coverage keeps pace with your life.