SIOUX CITY -- If the stone falls out of your diamond ring while you're working in the yard and the ring isn't a scheduled item under your homeowner's policy, Tim McClintock said, stone replacement won't be covered.
Homeowners and renters insurance can be confusing. There are different types of coverage and varying deductibles, but one thing is certain: it's in your best interest to have a policy, according to McClintock, president of McClintock Insurance Inc. in Sioux City.
If you finance your home with a mortgage, most lenders will require you to carry homeowners insurance to protect your home in case of a fire, natural disaster or other event that could cause damage.
Renters will want to have a policy to cover their belongings as well, Tim McClintock said. Still, many people forgo homeowners and renters insurance. They don't believe anything will happen to their investment, or they think insurance costs too much.
"If they don't have a mortgage, they don't have insurance. You'll see those on the news all the time starting a GoFundMe page because they didn't have insurance," said McClintock, who said a renters insurance policy can cost as little as $15 to $20 a month.
Pools, trampolines and certain animals could drive up your rates or cause a carrier to drop your policy, while a good credit score and updates to your home's heating, electricity, plumbing or roof could save you money, according to McClintock.
Before purchasing a policy, he said, you'll need to consider which type of insurance coverage is best for you. Before purchasing a home, he encourages clients to ask their realtor about any updates the previous owner made to the home's roofing, plumbing, electrical, heating and air conditioning systems.
You'll want to familiarize yourself with the terms "replacement cost" and "actual cash value" and their meanings, as well as the types of deductibles you'll be charged. While the standard deductible is $1,000, McClintock said you may also have a percentage deductible in your policy for damage caused by wind or hail.
"You might have a $1,500 deductible for wind and hail, or you can have a percentage applied to the roof or your structure for wind and hail," he explained. "That has been a big change for a lot of people."
If your house floods and you don't have flood insurance, you're out of luck. McClintock said you have to buy a flood policy to have flood coverage.
A typical homeowners insurance policy also doesn't cover water line or sewer line backups. McClintock recommends that homeowners purchase additional coverage, which many insurance companies are now offering as an option. Through a partnership between the City of Sioux City and HomeServe USA, water line protection is available for $4.49 a month and sewer line protection for $7.99 a month.
"Even some of the newer stuff that they've been putting in have had breaks in the water lines and sewer lines," McClintock said of the city. "There was one on Jackson Street. On Pierce, Street they had a flood. They've had some out in Morningside. Because our infrastructure is old, that's where the losses are coming from."
The average claim if the break is on the homeowner's side of the street can be $5,000 to $6,000, according to McClintock. If the break is across the street from the homeowner, he said the claim could be $8,000 to $10,000.
"It used to be the property owner was responsible from the house to the shutoff and the city code has changed that you're responsible from your house to the main sewer line and the main water line," he said. "Most of the expense comes as you have to dig up the street to get to that unless the water line is on your side of the street."
Insurance policies also provide limited coverage for jewelry, money, antiques, guns, sporting equipment and artwork. If you have rare, valuable items, you'll want to protect them with scheduled personal property, optional coverage you can add to your homeowner's or renter's policies.
McClintock urges clients to take photos and videos of all of their possessions to store on a USB drive kept in a secure location, such as a safety deposit box. After a disaster strikes, he said it can be difficult to recall all those belongings tucked away in closets and cabinets. Photos make a good record, as do receipts.
Not sure if it's covered?
McClintock said the best thing to do is read your policy or call your insurance agent.