Frequently Asked Questions on Home Insurance
How Does Home Insurance Work?
Homeowners insurance is a form of property insurance designed to protect an individual's
home against damages to the house itself, or to possessions in the home, Homeowners
insurance also provides liability coverage against accidents in the home or on the property.
Homeowners insurance provides financial protection against disasters, a standard policy
insures the home itself and the things you keep in it.
Homeowners insurance is a package policy, This means that it covers both damage to
your property and your liability or legal responsibility for any injuries and property damage
you or members of your family cause to other people, This includes damage caused by
What Is Coverage Like for House and Property Insurance?
Generally, covered properties are divided into four separate categories, The definitions of
the property, and the extent of coverage vary by state, company and product. The four
separate categories for your home, as defined by insurance companies, are:
- Dwelling - The structure of the house is considered a covered property.
- Other Structures - These are structures that are separate from the house, or
connected to the house by a fence, wire or other form of connection, but not
otherwise attached to the dwelling, such as a tool shed or detached garage.
- Personal Property - The contents of your home are your personal property. This
includes furniture, appliances and clothing. Not all personal property is covered.
Items more appropriately covered under different forms of insurance may have
limited or no coverage for loss. These items include, but are not limited to, money,
jewelry and firearms.
- Loss of Use - When a loss occurs due to a covered peril and the dwelling becomes
uninhabitable, the cost of additional living expenses is covered. Reimbursement of
additional living expenses covers the cost to the insured for maintaining a normal
standard of living.
- Personal Liability and Medical Payments.
- Many additional endorsements can be added (Contact Us).
Damage caused by most disasters is covered but there are exceptions. The most
significant are damage caused by wind and hail. You must
buy two separate policies for flood and earthquake coverage. Maintenance-related
problems are the homeowners' responsibility.
Why Do Premiums for Insuring Home Vary?
Homeowner's policy is a multiple-line insurance policy, meaning that it includes both
property insurance and liability coverage, with an indivisible premium, meaning that a
single premium is paid for all risks.
The cost of homeowner's insurance often depends on what it would cost to replace the
house and which additional endorsements or riders are attached to the policy. The
insurance policy is a legal contract between the insurance carrier (insurance company) and
the named insured(s}. It is a contract of indemnity and will put the insured back to the state
he/she was in prior to the loss. Typically, claims due to floods or war (whose definition
typically includes a nuclear explosion from any source) are excluded from coverage,
and other standard exclusions (like termites). Special insurance can be purchased for
these possibilities, including flood insurance. Insurance is adjusted to reflect the cost of
replacement, usually upon application of an inflation factor or a cost index.
Major factors in price estimation include location, coverage, and the amount of insurance,
which is based on the estimated cost to rebuild the home ("replacement cost").
Get A Home Insurance Quote from Koch Insurance
To see how our home insurance policies can help your family feel secure, please contact
us for a free quote. Koch Insurance agencies are located throughout South Dakota, with
office locations in Tea, Tyndall, Tabor, Springfield, and Yankton. We'll provide you with all
the information you need to make an informed decision on your property safety.