Personal Property

Whether you rent or own a home, think about what it would cost to replace all of your personal belongings. Make a room by room inventory and don’t forget to include items stored in your basement or attic.

Ask your insurance agent about replacement cost coverage. It may cost more, but if you suffer a loss your insurance company will not depreciate the value of older items when settling the claim with you. This means you will be able to replace most damaged or stolen items with new ones.

Certain valuables such as jewelry, silver, business property, antiques and furs, are subject to dollar limits. If you own items of special value, ask your insurance agent about obtaining a rider or endorsement that will increase the amount of your coverage.

Replacement cost coverage is also an option for most homeowners when choosing an insurance policy on their home. If your home qualifies for replacement cost coverage, you should insure the home for the cost to rebuild it, from the ground up, with the same type and quality of construction you currently have.

The market price of a home may differ greatly from its replacement cost. A home’s market price is the amount it might sell for, including the value of the land or lot where it is located. Replacement cost coverage is based solely on the cost of rebuilding your home with similar materials, craftsmanship, and factors-in local construction costs. Your insurance agent or company can help you calculate your home’s replacement value.

Actual Cash Value coverage covers the cost to replace your home minus depreciation for age and use. This type of policy may be less expensive than replacement cost coverage because you need not insure your home for its full replacement value under this type of contract. Keep in mind, however, that claim payments will be less because depreciation is taken for age and wear and tear.

Modified Replacement Cost or Repair Cost coverage may be a good option for older homes that do not qualify for replacement cost coverage. These policies pay claims on a replacement cost basis, but claim payments are based on the use of common building materials and construction techniques currently in use.

Additional considerations include building codes in your community that may require higher standards for rebuilding all or portions of your home, a sudden rise in construction costs, and improvements or additions to your home. Make certain you discuss all of these topics with your insurance agent when deciding how much insurance to purchase on your home.

What is replacement cost coverage?
Replacement cost coverage will pay for the repair or replacement of damaged property with materials of similar kind and quality.  The insurance company won’t deduct for depreciation – the decrease in value due to age, wear and tear, and other factors.

Are “Acts of God” covered by my policy?
Yes, with some exceptions.  The term “Acts of God” is not used in homeowners policies.  It is a term that is usually used to refer to natural disasters like hurricanes or tornados.  Most natural disasters, like damage from windstorms, hail, lightning and volcanic eruptions, are covered by homeowners insurance policies.  Damage from floods and earthquakes are not covered.  Policies that provide coverage for flood and earthquake damage must be purchased separately.

Actual Cash Value:

A claim settlement amount that is equal to the replacement cost, minus depreciation for age and condition.

Binder:

A temporary insurance contract that provides coverage until a permanent policy is issued.

Deductible:

The amount you agree to pay for each claim before the insurance company begins to pay.

Depreciation:

The decrease in value of property over time due to age or use.

Endorsement:

An attachment to the policy that adds or subtracts coverage, or changes the original policy.

Exclusion:

Specific situations or circumstances that are NOT covered by the insurance policy.

Floater:

Extra coverage added to your policy for items of special value such as jewelry, furs and antiques. Floaters, or “riders” added to the policy, cost extra.

Guaranteed Replacement Cost Coverage:

Coverage that pays the full cost to repair, replace or rebuild your home, even if it costs more than your policy limits. Some companies put a cap on the coverage, such as 125% of your policy limit.

Inflation Guard Coverage:

Insurance protection that automatically raises the coverage on your policy each year to keep up with the rate of inflation.

Liability:

A debt you are required by law to pay when you cause injury or damage to someone, due to your negligence, fault or carelessness.

Peril:

An event that causes a loss such as tornado, fire, theft or wind.

Personal Property:

Furniture, appliances, clothing and other items you own that are not permanently attached to your home.

Premium:

The amount of money charged for insurance protection.

Replacement Cost Coverage:

Insurance protection that pays the full cost to repair, replace or rebuild property that is damaged by a covered peril, up to the policy limits.

How to Find a Good Agent
A good insurance agent adds value to your insurance policy and may save you money in the long run. Ask friends, relatives and neighbors for agent and company recommendations.
The Wisconsin Insurance Commissioner’s Office can assist you in verifying whether someone is a properly licensed agent. Other factors that may be important to you include where the agent’s office is located and the agency’s office hours.
Insurance agents fall into two broad categories; independent agents and exclusive agents. Independent agents represent many different insurance companies and exclusive agents write business for only a single company. Contact BOTH types of agents when you are shopping for coverage and value.
You may also wish to search the Internet for even more options. Before you purchase, however, it is wise to research the company or firm with which you are considering doing business. To confirm whether a company is licensed to write business in Wisconsin , consult the Wisconsin Insurance Commissioner’s Office.

Home Daycare or Business
If you work at home you may need special coverage for business property like your computer or other tools of your trade. You may also need special liability insurance if you are running a business, such as child daycare, from your home. Make certain you discuss the nature and scope of your home business with your insurance agent or company representative. Your policy may already contain the extra coverage you need, or you may need to add a special endorsement or rider to the basic policy. In some cases, it may be necessary to purchase an additional policy. Your insurance agent will advise you on the best way to accommodate your home business insurance needs.

What if I’m Turned Down for Property Insurance?

Insurance companies may decide who they will insure based on a review of your application for insurance.  If a company refuses to insure your home you are entitled to:

Proper notification -  If you have applied for a new policy, a company may cancel during the first 60 days.  You must receive at least 10 days notice that coverage will end.  If a company refuses to renew an existing policy, they must give you at least 60 days notice.

An explanation for the company’s decision - The company’s explanation must be specific and in writing.  For example, if the company’s letter states that they will not insure your property because it “does not meet underwriting guidelines,” you should contact the company for more specific information.

Information on how to apply for coverage with the Wisconsin Insurance Plan - The Wisconsin Insurance Plan provides insurance for property owners who are not able to find coverage with other companies.  All insurance companies must tell you about the Wisconsin Insurance Plan if they turn you down or do not renew your property insurance policy.

What is the Wisconsin Insurance Plan?

The Wisconsin Insurance Plan (WIP) is a company that insures certain properties rejected by regular insurance companies.  WIP is not a state agency, nor are its programs funded with tax dollars.

If your company refers you to the WIP, it does not mean this is the ONLY company that will insure your property.  Every insurance company is different.  If one company will not insure you, another company may agree to give you coverage.

Always check with more than one agent or company.

If you still cannot find coverage, ask your insurance agent to help you apply to the Wisconsin Insurance Plan.  Any agent licensed by the State of Wisconsin can assist you in applying for coverage with WIP.

If you do apply to WIP, keep in mind that this is insurance of last resort.  Policies from the Wisconsin Insurance Plan are more expensive because the company’s policyholders experience a larger number of claims.

Consider a WIP policy to be a TEMPORARY solution for property insurance problems.

As soon as you have made repairs or improvements to your property, you should contact your insurance agent to request a review.  You may cancel your Wisconsin Insurance Plan policy without penalty as soon as you get coverage with another company. For more information about the Wisconsin Insurance Plan, go to the WIP website.

What Factors Affect How Much I Pay for Property Insurance?

The amount you pay for insurance is based on how likely you are to have a claim.  The reason you buy insurance is because no one can predict the future.  Insurance companies, however, must try to predict your future claims.  Companies do this through a process called underwriting, and here is some of the information they consider.

Your Job – If you work at home you may need special coverage for business property like your computer or other tools of your trade. You may also need special liability insurance if you are running a business, like child daycare, from your home.

Your Claims - Recent claims can affect your application for insurance.  Even claims caused by factors beyond your control, such as wind and hail, can pose a problem. Your company will need to know what caused past claims in order to determine whether or not the same type of claim is likely to occur again.  Have you done everything possible to prevent the same type of loss from happening in the future? If you have made changes to your home such as adding an alarm system or installing deadbolt locks, make sure you report these improvements to your agent.

Your Credit - a company may request Consumer credit reports, especially for new policyholders.  If you have had some credit problems in the past let your insurance agent know about any special circumstances that may have contributed to your past credit problems.  Also, inform your agent if you have taken steps to improve your credit rating such as attending budgeting classes.

If a company rejects your insurance application based on information contained in your credit report, you have the right to review the report information for accuracy, at no charge.  You should request a copy of the report directly from the credit agency.  Your insurance company must provide you with the credit agency's name, address and telephone number.

Wisconsin consumers can obtain a copy of their credit report at no charge. Consumers should check their credit reports once per year.

Your Property - Many insurance claims are caused by a failure to maintain walkways, porches, railings and other features in and around your property.  An outside inspection may be done by a representative of the insurance company to check for maintenance problems and to determine the insurance value of your home.

Liability Hazards - Conditions that may cause a liability claim include missing or loose handrails, porches in poor condition, or sidewalks that are uneven or crumbling.  These hazards could cause a guest or delivery person to trip and fall.

Pets - Household pets may also present a hazard.  Under Wisconsin law, double damages must be paid to injury victims if the pet involved in the claim has a history of injuring someone in the past.  Unless the animal is removed from your household, you may find it difficult to obtain liability insurance. Certain pets and dog breeds have a higher likelihood of being involved in personal injury claims. Some insurance companies may refuse to insure you if you have a pet that falls into this category.  

Older Homes - When was your home built?  Plumbing, heating and electrical systems in older homes may require updating.  The original systems were not designed to handle dishwashers, microwave ovens and all the other appliances in common use today.  Overloading outdated systems with the demands of modern living could result in fire or water damage.

Location - The location of your property is important, but insurance companies may not refuse to insure you solely because of the neighborhood your home is located in. In areas where homes and businesses are built close to one another, the condition of the buildings next door may also be important.  Vacant properties attract vandals and arsonists.   Fire, smoke, and vandalism damage to an empty house next door might easily affect your home, too.

Tips for Saving Money on Home & Renters Insurance

Shop Around

Prices vary from company to company.  Get at least three price quotes by calling local insurance agents and checking on the Internet.

Increase Your Deductible

Deductibles are the amount you pay before your insurance policy kicks in.  By increasing your deductible from say $200 to $500, you could substantially lower your property insurance premium.

Combine Property Insurance with Auto Insurance

Many insurance companies provide a discount for carrying two or more policies with them.  Consider combining your home or renters policy and your auto insurance with the same company.

 Maintain Good Credit Record

Insurance companies are increasingly using credit information to price property insurance policies.  Protect your credit standing by paying bills on time and keeping your credit balances low.  Check your credit record on a regular basis and have errors corrected promptly.

 Improve Home Security

Smoke detectors, burglar alarms and deadbolt locks can prevent or minimize damage or loss.  More sophisticated alarm systems will also help.  Many companies provide discounts for these security measures.  Always report home security improvements to your insurance agent and ask about possible discounts.

Ask About Other Discounts

Claim-free property owners and long time policyholders are often rewarded with discounts by their insurance companies.  Ask your agent about available discounts.