Homeowners Insurance FAQs

Q: What is homeowners insurance?
A: Homeowners insurance protects your home and your personal items. The typical homeowners policy has two main sections which:

1. 1. Covers the property of the insured
   2. Provides personal liability coverage to the insured

Q: What do I need to know when purchasing homeowners insurance?
A: To avoid insufficient protection or overpaying for unneeded coverage, work with an experienced agency like McMahon Insurance. With our expert assistance, you’ll:

• • Determine the amount of personal property insurance and personal liability coverage that you need.
  • Select any additional endorsements you want to add to your policy.

Q: What is actual cash value?
A: When “actual cash value” is used in a policy, a policy owner is entitled to the depreciated value of the damaged property.

Q: What is replacement cost?
A: When “replacement cost” coverage is used in a policy, a policy owner is reimbursed an amount necessary to replace the article with one of a similar type and quality at current prices.

Q: What if I collect antiques or have expensive jewelry? Are such items covered?
A: Yes, you have limited coverage for antiques, collectibles and jewelry under Coverage C of a homeowners policy. But we recommend you schedule these items on your policy, which provides broader coverage if they are lost, stolen or damaged. To do so, we will need an appraisal of your articles to get the items scheduled on your policy.

Q: Should I purchase earthquake coverage?
A: Direct damages due to earthquakes are not covered under the standard homeowners insurance policy. If you live in an area that is prone to earthquakes, you may want to consider adding an earthquake endorsement to your homeowners insurance policy. This endorsement will cover damages due to earthquakes, landslides, volcanic eruptions and other earth movements. While not common, earthquakes do occur in New Jersey and surrounding states, reports the U.S. Geological Survey.

Q: Should I purchase flood coverage?
A: If your property lies in a flood plain as determined by US Government Flood Maps and have a mortgage, you are required to carry flood insurance. But everyone should consider flood insurance because damage from rising water is excluded under homeowners insurance. What’s more, 25% of all flood losses happen outside the high risk flood areas each year in the United States. Contact McMahon Insurance for more information or a flood quote today.