When I first started in the insurance business, I didn’t know “how to spell insurance” as my boss says. Not literally of course, but I knew nothing about the industry. Oklahoma insurance can be very complicated and sometimes it helps if someone just spells out insurance for us dummies.
In the spirit of learning to spell insurance, I figured it might be helpful to go over the Declaration Page to your Oklahoma Homeowners Policy. I’m sure you’ve had your mortgage company ask for a certificate or dec page to show proof of insurance. But do you even know what kind of information is on the dec page?
The first page on your homeowners policy is usually the declaration page. This page gives a brief summary of your coverage amounts, your basic information such as your name and address and the property location (sometimes this is different from your mailing address), the policy term (meaning when your policy starts and when it ends), if you have a mortgage company listed on the policy, and what most of us look for…. the premium.
The section that shows your coverages, deductible, and amounts of coverage is very important. You see words like dwelling, loss of use, or liability. But what do they mean and what do they cover. Well I’ll tell you:
Dwelling – The structure of your home, apartment, or building. This is not necessarily just the outside. Think of it as building a brand new home, before you move anything in, this is the dwelling. Anything that is not attached or bolted to the building.
Other Structures – Do you have an unattached garage? How about a shed or barn? These are buildings on your property that are not attached to your home. Key words “Not Attached”. This amount is usually ten percent of the dwelling amount.
Personal Property- All your things. If you could take your house and turn it upside and dump everything out of it, all the stuff that comes flying out would be covered under Personal Property (there are some regulations to this, meaning lots of expensive jewelry, high dollar guns, paintings, some of these you will have to speak to your agent about to get proper coverage for because Personal Property may not cover all of it). Keep good documentation of what you own. Maybe film everything in your house and make several copies. Take one to your bank & keep in a locked box. Should you lose everything, you will have something showing what you used to own and now need replaced. Just a little side note. Also, this amount is around fifty percent of your dwelling.
Loss of Use – Let’s say a tornado comes through Oklahoma (happens all the time) and your home gets destroyed. While you’re rebuilding and you can’t stay in your damaged home, you have to stay in a motel. Loss of Use helps with those kinds of expenses. Keep your receipts for your adjustor to look over. Loss of Use in most cases is twenty percent of your dwelling.
Personal Liability- If someone gets hurt (other than yourself of course) while on your property, your Oklahoma Homeowners Policy has coverage for that person. The liability prevents you from having to pay out of your pocket for your neighbor’s broken leg that they got while in your back yard. Remember, liability will ALWAYS go to the third party. You can never use the liability part of your auto or home policy for yourself. It’s always for someone else.
Medical – This is just a small extra coverage that is included in most Oklahoma Homeowners Policies. Let’s say you’re in the back yard raking leaves, and you sprain your ankle. If you have to go the emergency room, this coverage can be used towards that expense. Even if it’s your children or the neighbor’s children, it can go to anyone. This coverage is offered in hopes of preventing someone from suing you. If you’re able to help pay medical expenses, chances are they won’t come after you for more money (ok, not in all cases, but in some).
Deductible – This is the amount that you pay in the event of a claim. If your claim costs more than your deductible, the insurance company takes care of the rest. There are some companies that require homeowners policies to have what’s called a Wind & Hail deductible. What this means is if you insure your home for $150,000 and you have a one percent Wind & Hail deductible, your deductible is $1500 should your claim involve wind or hail. Hello, we live in Oklahoma. When do our claims NOT involve wind or hail?!?! On the bright side, if you have a Wind and Hail deductible you usually get a bigger discount which equals a lower premium. You just have to decide which is better, a lower premium now and more out of pocket expense later or a little higher premium, and not so much money out of pocket in the event of a claim.
Now, just to show you what your coverages would be if you had an Oklahoma Homeowners Insurance policy, here is an example:
Other Structures – $20,000 (10% of dwelling)
Personal Property – $100,000 (50% of dwelling)
Loss of Use – $40,000 (20% of dwelling)
Personal Liability – Can be either $100,000, $300,000, or $500,000
Medical – Usually either $1,000, $5,000, or $10,000
Deductibles-$500, $1,000, or $2,500 and can also include 1% or 2% Wind & Hail
And that is the basic overview of a Homeowners Policy. Take a look at your own and make sure your coverages are at the appropriate limits. Better to be safe than sorry.