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Policy Coverages

General Information
A common misconception is that homeowner's insurance is simply a way to pay for repairing or rebuilding a damaged home. While this certainly is an important reason to buy insurance, the homeowner's policy covers much more than that. Personal property such as jewelry, money, furniture and clothing are protected. Also personal liability coverage, protection against lawsuits and for injuries to others for which you may be held responsible is also included.

What to know when looking for homeowners insurance
If you are shopping for homeowners insurance, know the following to make getting a price quote as smooth and easy as possible:

• The number of rooms including garages, lanais and other structures and the square footage of each.
  
• Basic structural information such as the year your home was built, if it has double or single wall construction, and the type of construction material used such as wood, concrete or brick.
  
• Discounts are usually offered if your home has certain safety features such as a smoke or fire detector, centralized burglary or fire alarm system, hurricane clips, or a fire extinguisher.

Coverages
The coverages below is intended to provide you a basic understanding of the different types of coverages that AIG Hawaii offers on its homeowner insurance policy. For complete coverage definitions as well as any conditions, limitations or exclusions, please refer to the actual policy contract.

Coverage for your home
If your home or a structure attached to the home such as a garage or lanai is damaged by a covered loss, homeowner's insurance will pay to repair or replace it. We recommend insurance coverage sufficient to replace your home and attached structures if they are destroyed. Keep in mind that replacement cost is not the same as market value, which usually includes the value of land and location.

Caution: Don't be caught underinsured! Let's say you purchased 70% of the replacement cost instead of 80%. Many insurers will pay only 70% of the total claim amount. Ask if an inflation guard endorsement or guaranteed replacement cost provision applies to your policy.

Coverage for structures not attached to the home
Structures not attached to your home, such as a tool shed or unattached garage, are covered. The amount of coverage that normally applies is 10% of the replacement coverage amount you chose for your home.

Caution: A swimming pool is also considered an unattached structure. Be sure the coverage for other structures has an adequate policy limit.

Personal Property Coverage
Personal property you own or use is covered when you are anywhere in the world. The amount of coverage that applies is normally 50% of the replacement coverage amount for your home. Payments are made on an actual cash value basis, which may be lower than the replacement cost of the property. Replacement cost coverge is available for an addtional premium.

Caution: Certain types of personal property such as jewelry, silverware, water craft and computers have special limits of liability or ceilings as to how much will be covered. Ask your agent to determine if additional coverage is needed to provide you adequate protection for those items.

Additional living expenses and rental costs
If your home is destroyed or damaged and not in livable condition, then the cost to rent a home similar to your own would be covered until your home is repaired, you are permanently relocated or the limit of this coverage is reached. The amount usually offered is equal to 20% of the dwelling coverage amount.

Personal Liability Coverage
This coverage pays for your legal costs if someone files a lawsuit against you for bodily injury or property damage even if the suit is not valid. If you are found liable, your insurance company will pay up to your personal liability policy limit to settle the lawsuit.

Medical Payments To Others
This coverage pays for necessary medical expenses to others if they are injured on your property or injured as a result of your actions. For instance, if a friend slips, falls and is injured on your walkway, medical expenses would be paid under this coverage.

Note: Protecting your hard earned assets is important. You may want to purchase more than the minimum amount of liability coverage your insurance company offers. In fact, looking into an umbrella policy for even more liability protection may be worthwhile.

Saving Money On Your Home Insurance
12 ways to save money when you buy your homeowners policy.

1. Select a strong insurer. Fast fair claim service is a must when it comes to homeowner coverage. Ask about the company.
   
2. Don't guess at your coverage. The cost of rebuilding your home might exceed your estimate. Consult your agent and determine how much you need to rebuild from the ground up.
   
3. Don't under-insure your possessions. Saving a few dollars up front could cost you a significant amount of money at a time of loss.
   
4. Always opt for replacement value. Unless you insure for replacement cost of household possessions, you will be paid only purchase price, less depreciation, for items burned or stolen.
   
5. Choose an appropriate deductible. The higher the amount of property loss you elect to "self insure," the lower your premium is likely to be.
   
6. Schedule art, furs, antiques and collectibles. Make certain all items of this nature are separately "scheduled" for their worth.
   
7. Ask about "off-premises' coverage. Don't take a chance with expensive equipment. Make sure your insurance covers possessions in transit and for "mysterious disappearance."
   
8. Make sure you get proper "credits". Many policies provide discounts for central and other alarm systems, for proximity to fire hydrants and fire stations... for proprer smoke alarms.
   
9. Check on your coverage for "living expenses". In the event of fire or other damage to your home, your policy should provide adequate payment for alternate lodging during the period of rebuilding.
   
10. Find out about excess liability. Don't take basic liability coverage for granted... expecially if you have "attractive hazards" such as a swimming pool or "frisky" pets.
    
11. Don't ignore earthquake and flood insurance. "It can't happen here" has cost many a homeowner thousands of dollars and countless grief. Neither peril is covered under standard policies--check them out.
    
12. Talk to us!