What are my options for homeowner coverage?

There are many ways that homeowner coverage varies. First, we'll discuss what losses your policy can protect you from. This is broken down into three categories in Nebraska which are special perils, broad perils, and named perils. Perils are the losses that are covered on the policy.

We'll start with Named perils because this is your basic coverage. If your policy has named perils coverage it means that your property is only protected from the 16 perils named in the policy which include:

1. Fire or lightning

2. Windstorm or hail

3. Explosion

4. Riots

5. Aircraft

6. Vehicles

7. Smoke

8. Vandalism

9. Theft

10. Falling objects

11. Weight of ice, snow, or sleet

12. Accidental discharge or overflow of water or steam

13. Sudden and accidental tearing, cracking, burning, or bulging

14. Freezing

15. Sudden and accidental damage due to short circuiting

16. Volcanic Eruption

Anything outside of those 16 perils are not covered. Broad perils coverage covers the same 16 perils but adds a few more to the list. Just like Named perils coverage, broad perils coverage doesn't cover anything that isn't listed. Additional perils added to the Broad form include:

17. Burglary/Break-in damage

18. Falling Objects (like tree limbs)

19. Weight of Ice and Snow

20. Freezing of Plumbing

21. Accidental Water Damage

Special perils coverage provides the most protection. This type of coverage is very different than Named and Broad coverage. Instead of providing protection for only the perils specifically listed on the policy, Special perils covers all perils UNLESS they are specifically excluded. This form of coverage is also referred to as “open perils” coverage because it provides a list of specific losses that are NOT covered within the policy.

Another important thing to think about is the valuation of your property that determines how your claim is paid. This is referring to Replacement Cost Value, Repair Cost Value, and Actual Cash Value.

Actual Cash Value (ACV) means that your property will be repaired or replaced using one of the following methods of valuation:

1. the cost to repair or replace the property - minus depreciation

2. the market value of the property in the current market

3. the "broad evidence rule" which considers all relevant evidence regarding the value of the property

Repair Cost Value pertains to older homes that were built with materials that are not readily available on the current market and therefore in order to repair or replace the property it has to be done with current materials. When it comes to homes built before 1930 it is much more costly to cover the home with replacement cost value, but it can be done, just with a higher premium.

Replacement Cost Value means that your property will be repaired or replaced with the same material or product or with same value as if it was brand new on the market today. There is no depreciation taken out of the value you receive for your property.

On a final note, there are many different endorsements that can be added to your policy to give you greater coverage. This is why it's important to discuss your specific situation with your agent to make sure you have the best coverage for you. Your agent can also help you chose the right deductibles, coverage limits, endorsements, and so much more to get the most out of your policy.