What are the 8 types of homeowners insurance and which should I have for my home?

Ralph Estep Jr.:
00:00

So here's the question for today. Is your home properly insured? You might be surprised by the eight types of coverage that you need to know about.

Ralph Estep Jr.:
00:13

Hey everyone. Welcome back to the Ask Ralph show. You know that feeling when you finally finished painting your house? Listen, I hate painting. But it looks amazing. You're proud, right? But then you imagine a tree falling on it or worse, a fire. And suddenly that pride turns into worry. Well today, we're tackling that worry head on and talking about something that protects your biggest investment: your home.

Ralph Estep Jr.:
00:47

We're diving deep into the world of homeowner's insurance, all 8 types of it. So stick around because you might be surprised by what you learn. Yesterday, we discussed the topic of whether you should buy or rent your home. Today's topic falls right into line with that discussion. So if you missed the episode yesterday, visit askralphpodcast.com and you get caught up right away.

Ralph Estep Jr.:
01:14

Now, a few days ago, we received this message from a listener named Jennifer from Denver. "Hi Ralph, this is Jennifer from Denver. I love your show, especially how you connect faith and finances. I just bought my first home and it's so exciting but also a little overwhelming. My insurance agent just sent me a quote and I honestly have no idea what half of this stuff means. Can you break down the different types of homeowners insurance and help me understand what I actually need? Thank you so much, Ralph." Well, Jennifer, you're speaking my language. Buying a home is a huge blessing. But it definitely comes with a learning curve and insurance is one of the big ones.

Ralph Estep Jr.:
02:03

So to everyone tuning in, welcome back to the Ask Ralph Show, mastering your finances from a Christian perspective. I'm so glad you're here ready to grow your faith and your financial knowledge. Today we're tackling Jennifer's question about the often-confusing world of homeowner's insurance.

Ralph Estep Jr.:
02:19

But before we get into the nitty gritty, let's take a moment to center ourselves in scripture. That's what we always do on this show. Proverbs chapter 24 verses 3 and 4 says this. "By wisdom, a house is built, and through understanding, it is established; through knowledge its rooms are filled with rare and beautiful treasures."

Ralph Estep Jr.:
02:46

So just like we need wisdom to build a strong home, we need wisdom to protect it. And that's where understanding homeowners insurance comes in. It's not just about checking a box. It's about being a good steward of what God has blessed us with. Now, look, I'm not an insurance agent, so you want to work with a professional agent or a broker and determine the right coverage for your specific needs.

Ralph Estep Jr.:
03:08

Now let's break down these 8 types of insurance that Jennifer asked about. All right, folks, well grab your notebooks and pens because class is in session. We're about to demystify these 8 types of homeowners insurance. Let's start with number 1. That's Dwelling Coverage. This is the bread and butter. It covers the structure of your home itself. The walls, the roof, the floors, and those beautiful built-in cabinets you love.

Ralph Estep Jr.:
03:37

Think of it as the protection for your castle walls. If a fire or a storm or other covered peril damages your home, this coverage helps you pay for the repairs or even rebuilding your home. So here's my first tip. My actionable item. Review your dwelling coverage annually to ensure it aligns with your current cost to rebuild your home. Remember, construction costs can and do fluctuate, especially in this economy. You may want to discuss the topic of replacement coverage with your insurance agent and make sure you're covered.

Ralph Estep Jr.:
04:10

Number 2. Other Structures Coverage. This one's for all the extras that make your property awesome. Those detached garages, those sheds and fences. Imagine a rogue Frisbee taking out your brand-new pergola. This coverage has your back. So here's another actionable tip. If you have valuable structures like a detached garage or a fancy gazebo, consider increasing your coverage limits. Make sure your agent is aware of any new additions or changes in your property. So when you get that property done and get it fixed up, make sure you contact your agent.

Ralph Estep Jr.:
04:45

Let's move on to number 3. And that's Personal Property Coverage. This is where things get personal. We're talking about your belongings, talking about your furniture, your clothes, your electronics. That vintage record collection you cherish. If they're damaged or destroyed by a covered peril, this coverage helps replace them. Again, this is a critical area to discuss with your agent if anything has changed.

Ralph Estep Jr.:
05:09

So here's another actionable tip. Take inventory of your belongings and estimate their value. This might determine if you have enough coverage and hey, while you're at it, snap some pictures and photos or videos for documentation. It'll come in handy if you ever need to file a claim. And make sure you store those photos and videos off site or in the cloud. Now that's a pro tip that you can use.

Ralph Estep Jr.:
05:31

Number 4. Loss of Use Coverage. Picture this: a storm rips through your town leaving your home uninhabitable. This coverage helps with the cost of temporary housing, temporary meals and other temporary living expenses while your home is being repaired. It's like having a safety net when you need it most. So here's another actionable tip. Understand the limits of your loss of use coverage. It's typically a percentage of your dwelling coverage. So make sure it's enough to cover your family's needs in a pinch.

Ralph Estep Jr.:
06:01

Let's look at number 5. And that's Personal Liability Coverage. Okay. Nobody likes to think about this one, but accidents happen. My mother told me that. If someone gets injured on your property and you're found liable, this coverage helps protect you from legal and medical expenses. So here's another actionable tip. Consider increasing your liability coverage if you have a pool, if you have a trampoline or frequently host gatherings. It's better to be safe than sorry. You may even want to consider what's called an umbrella policy. I did a show a few weeks ago on those policies. So I encourage you to check that out at our website.

Ralph Estep Jr.:
06:37

Let's move on to number 6. And that's Medical Payments Coverage. Let's say a neighbor trips on your welcome mat and needs a trip to the ER. Ouch. This coverage helps you pay for their medical bills, regardless of who's at fault. And trust me, these things happen. I've seen them happen many times with my clients. So here's an actionable tip. Even if you're a cautious homeowner, accidents can happen and unfortunately will happen. Review your medical coverage payments to ensure it aligns with your comfort level and discuss your concerns with your agent to make sure you're covered.

Ralph Estep Jr.:
07:11

Let's move on to number 7. And that's Additional Living Expenses or what they call ALE. This is similar to loss of use but kicks in when your home becomes uninhabitable due to a covered peril that forces you to relocate. It covers the increased cost of living elsewhere such as higher rent or higher transportation costs. Maybe you're moving farther away, but you're keeping the same jobs. You've got a lot much larger commute. Here's another pro tip. Understand what your policy considers comparable living standards to avoid any surprises if you need to relocate temporarily.

Ralph Estep Jr.:
07:46

And number 8. Endorsements or Riders. And these are not the riders on the back of that Harley. Think of these as the add-ons of the homeowner's insurance world. They provide extra coverage for specific items or situations that might not be fully covered under your standard policy. For example, you might need an endorsement for that valuable jewelry. Maybe you've got some cool artwork or even identity theft protection. Most people are surprised by items which may not be covered without these riders, such as collectibles, firearms and other separate items. This is where clear communication with your agent is so very important.

Ralph Estep Jr.:
08:24

So my final actionable tip is this. Take inventory of your belongings and identify any high value items that may require additional coverage beyond your policy standard limits and express these to your agent. And make sure you have the coverage you need. You don't want to learn about these limitations once your home was leveled by a storm or damaged in a fire. Wow. That was a whirlwind tour of homeowner's insurance, wasn't it?

Ralph Estep Jr.:
08:48

A lot to cover there but remember. Just like we rely on God's guidance in our lives, we can rely on knowledgeable professionals to help us navigate these decisions. So don't be afraid to reach out to a trusted insurance agent and ask questions. They can help you understand your specific needs and find a policy that provides the right coverage for you and your family, and more importantly, your budget.

Ralph Estep Jr.:
09:12

And speaking of seeking guidance, remember Jennifer's question about what coverage she actually needs. Well, that's a conversation best had with an insurance professional who can assess her individual situation. But armed with the knowledge of these eight types of coverage, she now has some empowerment to ask the right questions and make better informed decisions.

Ralph Estep Jr.:
09:33

The truth is protecting our homes is important. But let's not forget the true foundation of our lives, and that's our faith. Just as we maintain our homes with care, let's also nurture our relationship with God. And speaking of nurturing, don't forget to join us tomorrow for another insightful episode of the Ask Ralph Show. We'll be tackling a question that's near and dear to my heart. What does biblical tithing actually mean? And how to develop a giving plan based on biblical principles? It's going to be a faith filled and practical discussion that you don't want to miss.

Ralph Estep Jr.:
10:07

As always, I want to hear from you. What are your burning questions about faith and finances? Head over to askralphpodcast.com and submit your questions. You might just hear it addressed on an upcoming episode and hey, while you're on the website, don't forget to sign up for our email list. You'll get a free copy of my book right here it is, Mastering Your Finances. It's a $10 value. Absolutely free. It's packed with even more tips and insights to help you achieve financial freedom God's way. Well, that's all the time we have for today. Remember to stay financially savvy, and God bless you and enjoy your Saturday.