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Homeowners insurance is a package policy that insures  your home and possessions. It covers both damage to your property and your legal responsibility for any injuries and property damage incurred  by family members and visitors. It even covers damage caused by  household pets.

If you own the home you live in, you have several policies to choose from and the most popular policy is the HO-3, which provides the broadest coverage. Owners of 1-2 family homes that are owner occupied – which is key – generally purchase the HO-3 with an endorsement (floater) to cover items of unusual value such as jewelry, furs, instruments, cameras, etc. Consider the following when purchasing an HO-3:

Know your deductibles. A lot of companies – especially those that advertise on TV with cute little lizard-like  creatures driving sports cars – will offer discounted policies, but will have higher deductions and you will get less money back in case of a claim.

Replacement costs. This pays the cost of rebuilding/repairing your home or replacing your possessions without a deduction for depreciation.  If replacement cost is available, it should be purchased for both dwelling and contents. If your contents are not insured for replacement cost, your contents will be depreciated because of age and use.

Guaranteed or extended replacement cost. This coverage offers the highest level of protection. A guaranteed replacement cost policy pays whatever it costs to rebuild your home as it was before the disaster–even if it exceeds the policy limit. Some insurance companies offer an extended replacement cost policy that pays a certain percentage over the limit to rebuild your home. Generally, it’s 20 to 25 percent more than the limit of the policy.

Endorsement, Ordinance, Law. You can, however, get an endorsement (or an addition to) your policy called Ordinance or Law to help pay additional costs you incur to construct, rebuild or repair the property caused by enforcement of building or zone code or law enforced at the time of the loss.

Adding a floater to your policy. The most common mistake people make when purchasing an HO-3 is that they think the policy covers items like jewelry and special collections like baseball cards, but it doesn’t.  Talk to your insurance agent about attaching a “floater” to your policy that covers jewelry or special collections’ theft, damage, and loss.  Let’s say you have a ring that has been appraised at $10,000 and it has been stolen from your jewelry box. If you have an HO-3 with a floater and an appraisal of the ring (which must be updated every 3 years), the insurance company will pay you the full amount or replace the ring, without a deductible.

When choosing an HO-3 policy, make sure it fits your lifestyle as well as your budget. But beware of companies that promise no-frills policies with low premiums, because there may be certain provisions that aren’t protecting you at all.

At Muller Insurance, our agents work directly for the insurance companies we represent. We can help you with your HO-3 and the floaters you will need to protect your greatest asset and your prized possessions.

About Roger J.
Muller, Jr.

Overseeing Muller Insurance’s day-to-day operations and always improving how the company can better serve its clients, Roger J. Muller,  Jr. is a Certified Professional Insurance Agent (CPIA) with 32 years experience in the insurance industry. He’s a travel agent, Certified Real Estate Appraiser (CREA), Certified Environmental Inspector (CEI), licensed Real Estate Broker and licensed Insurance Agent in the following states: New Jersey, New York, Pennsylvania, Connecticut, North Carolina, South Carolina, Florida, Maryland, Washington D.C., New Mexico,  Arizona, Vermont, Ohio, Delaware, Maine, Georgia, Virginia and New Hampshire. Roger J. Muller, Jr. is a member of Sigma Xi, a lifetime member of the Hudson River Fishing Association, and Shriners-Salam Temple. A graduate of Ramapo College of New Jersey, Muller is a past board member of the Ramapo College Alumni. He has been a member of the Board of the Hoboken Chamber of Commerce since 2000 and served as Vice President in 2010.  He is a New Jersey Notary Public and a member of the Young Insurance Agents, NJ. He is a certified member of  the Hoboken Community Emergency Response Team (CERT) that responds to emergencies like building collapses, flooding and acts of terrorism.