The first area covered is the dwelling itself. The second area covers structures such as a detached garage, gazebo, shed, pool, or guest house. The third area of coverage is personal property, meaning the contents of the home at the time the fire occurred. The fourth and last area of coverage is for loss of use or additional living expenses. This means that your insurance company will pay for you to move out and live somewhere else while your home is being repaired or rebuilt.

If you want additional coverage, you can add what are called endorsements. Endorsements are essentially “add-ons” to your policy. These might be used to cover expensive collectibles or rare items, jewelry, furs, or art. These add-ons are called personal property endorsements, which allow a homeowner to cover a specified item. The payout for a loss such as fire is equal to an amount agreed upon by the insurer. For example, if a $5,000 painting is lost in a fire, the insurance company will pay out $5,000 with no deductions made for depreciation and without requiring a deductible if you cover it under a personal property endorsement.

A similar endorsement is called personal property replacement cost. A standard homeowner’s policy pays the actual cash value for any fire damaged. Because of depreciation, however, actual cash value is always significantly less than the replacement cost. With a personal property replacement cost endorsement, a homeowner can remedy this issue by receiving the actual cost to replace any item that is lost or damaged in a fire, such as furniture, electronics, etc. regardless of the item’s value at the time of the loss.

Another endorsement you may want in case of fire would cover code upgrades. These are changes to building laws that may require you to add new features to your home that weren’t required when the home was originally built. If you don’t have this endorsement, you would have to pay this difference out of your own pocket.

A good piece of advice for anyone who is purchasing a homeowner’s policy and is concerned about loss due to fire is to make a good record of the belongings in your home. Take a video camera and record the entire outside the house and then walk through the whole interior of the home. Along the way, identify all of your personal property and record it on tape. Open all of the closets and shoot inside your storage spaces as well. Take time to record what is in your sheds and outbuildings too. Insurance experts say that this is the best way to prepare yourself in the unlikely and devastating event that you should experience a fire in your home.

Each item below has limited coverage in the event of a covered loss. (Some items are not covered at all.)

1. Cash, Coins and other cash equivalents . (stamps, Travelers checks, Bank Notes)
2. Property used or intended to be used in Business. (TOOLS IF YOU MAKE YOUR LIVIMG FROM THEM)
3. Home computers
4. Rugs, Tapestries, Wall hangings
5. Silverware and Gold ware
6. Guns/Firearms
7. Jewelry
8. Trading cards, Comic Books, Coin Collections
9. GOLD/SILVER Bullion
10. Watercraft and equipment
11. Trailers
12. Cars stored in the garage (ONLY AUTO POLICIES INSURE CARS)

The insurance policy contract provides coverage for some things that happen to your home and contents…. But not for EVERYTHING THAT CAN HAPPEN. Here are areas that you should be aware of:

Losses to your home because of:

Arizona House

1. Birds, rodents, insects or domestic animals are not covered. (When your dog goes crazy on New Year’s Eve and rips down all the drapes… not covered!)
2. Damage to your home caused by deterioration, settling, contamination or nuclear hazard… not covered. (That old roof, is probably not an insurance problem. The crack in the tile floor, probably not.)
3. Earth movement including earthquake and mudslide is not covered under your home policy.
4. Flood is not a covered loss under a home policy. (Toilets overflowing are not floods!) Flood usually happens when it rains for 40 days and 40 nights… If you see animals going by the house in groups of two chances are that there will be a FLOOD. ) If you purchased a FLOOD policy, you will have a chance to make a claim.

In recent years, more and more people are running a business from their home. The common belief is that if the business is in the home that the home policy will cover the business. STOP THINKING THIS!! Your business in home needs the same type of business policy as if you were renting space in a strip mall or had your own business location. Your home policy was never intended to insure the business contents or liability exposure.

To find out how much coverage you need or see if you are currently under-insured, please fill out one of our free Arizona Home Insurance quote forms.

I love insurance for what it was designed to do. It protects you from financial loss for certain things, but not everything. The best way to make sure that your unique situation is taken into consideration when purchasing any insurance contract is to take the time to work with your agent. Go over the areas that are limited. Agree to taking on the risk yourself or passing it on to the insurance company for additional premium, but most importantly, don’t learn about your contract after the loss happens!