Insurance summer school continues
Welcome to Insurance Insight summer school where Insurance 101 continues. Today we’re going to discuss insurance lingo.
Vacant vs. secondary vs. seasonal. Primary vs. rental. Huh?
Underwriters don’t like when a home is vacant for long periods of time. Why? Because the exposure is greater with an unoccupied home.
There was an instance several years ago when an empty home was for sale, and the person tasked to check on it opened the front door to water cascading down the stairs.
It was winter and it seems a pipe broke in an upstairs bathroom and the home had been flooding for who knows how long.
This is why it’s important to tell your agent when you are planning on moving to a new home and your current home hasn’t yet sold. They can advise you on what coverage changes to make.
A secondary or seasonal home is a home in addition to your primary home during the year. Insurance premiums for these are usually a bit higher because the exposure is greater: long periods with no occupants, rural isolation, and guests for instance. And, most of the time, a homeowners insurance policy doesn’t extend to a second home.
Rental property can be covered under something called a dwelling fire policy. These are generally more expensive because they are occupied by tenants, who might not take as good of care of the property as the owner. The policy covers the dwelling itself, your property inside such as appliances, and rental loss income.
If your property becomes uninhabitable as a result of an insured event like fire or flood, loss of rent insurance will cover the income you’ve lost as a result of your tenants no longer paying rent.
Primary insurance is for your owner-occupied dwelling. It covers many things such as the home itself, detached structures, unscheduled property, liability and medical payments (if someone gets hurt on your property), among other coverages.
As mentioned in a prior issue of Insurance Insight, it is recommended you inventory your personal property in case of fire or theft.
Your insurance professional can help you with suggesting the best method of doing this.
This is a summary of home insurance lingo. Check with your insurance professional for details about your specific insurance needs.
Susan Nichols-Alvis is the owner of Nichols Insurance Agency in Rifle. You can reach her at 970-625-0411 or visit http://www.farmersunioninsurance.com/snichols.
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