New Jersey (NJ) Homeowners Basic Insurance Coverage
The New Jersey the Homeowners Basic Insurance policy (form HO3), tenants homeowners policy (form HO4), or condominium homeowners policy (form HO6) provides coverage against risks of direct physical loss to real property, except for those causes of loss specifically excluded. This means you are covered from everything except (war, nuclear, flood, etc.) Yes, you are covered by a hurricane and tornado!
HERE IS A SIMPLE EXPLANATION OF A HOMEOWNERS POLICY
DWELLING (coverage a) pays if your house is damaged or destroyed by a covered loss. Coverage is based on the value of the structure.
OTHER STRUCTURES (coverage b) pays if a structure not attached to your house, such as a detached garage, storage shed, and fence are damaged or destroyed by a covered loss.
PERSONAL PROPERTY (coverage c) pays if the items in your house such as furniture, clothing, and appliance are damaged, stolen or destroyed by a covered loss.
LOSS OF USE (coverage d) pays your additional living expenses (costs over the normal amount) for housing, food and other essential expenses, if you must temporarily move because damage to your house from a covered loss renders it uninhabitable.
PERSONAL LIABILITY (coverage e) pays to defend you in court against certain lawsuits and provides coverage if you are found legally responsible for someone else’s injury or property damage.
MEDICAL PAYMENTS to others (coverage f) pays the medical bills of people hurt on your property. It might also pay for osome injuries that happened away from your home, such as your dog biting someone at the park.
Endorsements are changes to the policy that can add or subtract coverage.
Here are a few areas coverage typically added to a policy: jewelry, furs, cameras, musical instruments, silverware, golfers equipment, fine arts, postage stamps and rare coins. Coverage is provided on the appraised value that the homeowner requests.
DWELLING REPLACEMENT COST
PERSONAL PROPERTY REPLACEMENT COST: Property loss settlements under the homeowner policy are made on an actual cash value basis. When the replacement cost endorsement is added the loss settlement payment would be sufficient to replace the item for the cost at the time of loss without deductions for depreciation.
Please note there are limitations for Dwelling Replacement Cost coverage such as the age of the house, which varies from company to company, as well as the house has to be insured to 100% of its replacement cost value.
IN HOME BUSINESS: Many people have an office in their homes, some as just additional workspace away from the office others as their primary work location. The unendorsed homeowners policy provides only $2,500 for equipment used for business on your property and $500 off. If your computer has a couple of work related programs on it, then it would be subject to this limit. If you have clients come to your home, a lawsuit due to injury might not be covered. Talk to us to find out what endorsements we can put on the policy to avoid these coverage gaps.
UMBRELLA/EXCESS LIABILITY: Your homeowner/Condo/Tenant policy provides liability coverage, typically $300,000 or $500,000. Your Auto policy also has liability coverage of various levels. If you are sued for a loss occurring on your property or an auto accident where you injured someone, there is a good chance these limits will not be enough to cover the settlement the judge or jury orders you to pay. You are then required to pay these amounts from your savings, by selling your house and other property or by having up to 20 years of future earnings earmarked for that payment. An Umbrella or Excess Liability policy provides a $1,000,000 of coverage for Bodily Injury and Property Damage over the amount provided by your primary policies. If you own a vacation home, dog, swimming pool, boat, waterfront property or have assets you want to protect, you definitely should consider having this coverage. Costs vary depending on the limits of your auto and how many autos you insure, you and other household members driving records or the size of your boat. We would be happy to give you a quote. To activate a policy, a signed application is needed. Depending on the company that writes your homeowner policy, this coverage could be on the policy as an endorsement or written as a separate policy.
EARTHQUAKE: Earthquake and Flood are always excluded coverage on a homeowner/condominium or tenant policy. earthquake coverage can be added as an endorsement. The coverage will have a 5% deductible applied separately to both the dwelling and contents portion of your policy. Coverage for a brick or partial brick unit would be costlier as the damage caused by an earthquake would be more extensive. Earthquake coverage will not cover damage directly or indirectly caused by a flood due to an earthquake.
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