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Different Types of Oklahoma Home Insurance: An Interview with Scott Cornelius of ECI Agency Inc.

By Scott Cornelius

Searching, or understanding for that matter, all the different types of home insurance available can be a difficult feat. Luckily for us, Scott Cornelius of ECI Agency Inc, an Oklahoma City Insurance Company, gave us the insight we've all been looking for.

How To Protect Yourself And Your Family With Home Insurance:

What you'll discover in this article:

  • How your home may not be fully rebuilt, even though you have insurance!
  • 11 ways to save money on your home insurance, including how to catch your insurer automatically increasing your premium every year
  • SIX primary kinds of insurance in your home policy? Yes, and the right decision for each one
  • The secret to brushing off a lawsuit
  • How your jewelry and other personal property are NOT covered, and what to do about it!
  • Why what's not covered is more important than what is
  • And more!

Your home is probably your most valuable asset. It is also a huge risk for you financially. What if something happens to it? A fire? A flood? Vandalism? Will your insurance policy actually pay for the damage? Will it pay for ALL of it?

What if someone visiting you slips and falls and suffers a serious injury? And sues you? An accident like that could put a dent -- or worse -- in your financial security.

For most people, insurance is a mystery. They know they need to have insurance for their homes (mortgage lenders require it), but they don't understand the protection provided by the policy. And, more importantly, they don't understand what their policy does NOT cover and what to do about that.

All homeowner's insurance is not created equal. In fact, almost none of it is. There are thousands of different products out there, from hundreds of insurance companies, and your policy includes literally dozens of options and decisions you must make that determine how much insurance protection you actually have. Your home policy is not a commodity. It's something tailored specifically to your needs and desires. Make sure you read your policy and know what is excluded and what is covered and for how much.

Six Primary Coverages Provided By Your Home Policy:

Your home policy protects you in six primary ways. You'll find these listed on your policy's "Declarations" page. Here's what they mean to you:

1) Dwelling:

The word "Dwelling" in your home policy essentially refers to your home itself. It includes attached structures, as well, such as an attached garage. The Dwelling Limit (or Amount of Insurance) stated on your Declarations page indicates the most the insurance company will pay to replace your home if it's destroyed by a covered claim. Make sure to ask yourself, is it enough?

Warning: Don't make the mistake of thinking your home is fully covered just because you have an insurance policy! You must make sure your Dwelling Limit is enough to rebuild your home. How?

Contact our office and one of our agents can run a replacement cost estimate that calculates the cost to rebuild your particular home. Be sure to adjust the amount of insurance for your dwelling appropriately. If you don't you may not have enough insurance to replace your home if disaster strikes.

Note: Some policies include built-in protection above the stated Dwelling Limit, usually a percentage of the Dwelling, just in case the estimate is too low. Be sure to discuss this with us as an additional protection feature. It's probably worth having.

Also, roofs are not always covered at replacement cost. Roofs older than 5 to 10 years could be covered for ACV (Actual Cash Value = Replacement Cost - Depreciation). Make sure you read your policy and verify that your roof is covered for replacement cost. Also, when purchasing a home, ask how old the roof is.

2) Other Structures:

The most common "Other Structures" are sheds, stand-alone garages (known as "detached" garages in insurance terms), barns, pool houses, etc. These structures are not directly attached to your home, or the "Dwelling".

Other Structures have their own protection limit - the most your company will pay to rebuild them - as stated on your Declarations page. This limit will be significantly less than the dwelling limit, usually 10%-20% of the Dwelling.

For most people that's plenty of insurance for other structures. But not for everyone. You need to know what it would cost to rebuild or replace those structures if they're destroyed. Discuss it with the licensed professionals in our office. You can buy more protection for your other structures if you need it.

3) Personal Property:

Your "Personal Property" is all your stuff: furniture, clothing, electronics, appliances, etc. It, too, has its own protection limit stated on your Declarations page. And, again, this amount is the most the insurance company will pay to replace your personal property.

Your personal property limit is usually 70%-75% of your Dwelling limit. However, you can adjust this upward if you need more protection, Discuss your options with us. We're here to help!

Regardless of the protection limit for your personal property, there's a very important question you must get answered, "How is your property protected?" Is it on an "Actual Cash Value" basis or a "Replacement Cost" basis? The difference is huge!

In very basic terms, if your property is protected on a replacement cost basis the insurance company will replace your old stuff with new stuff. For example, if your 5-year old TV is destroyed in a covered claim, the company will pay for a brand new TV. That's a good deal for you.

But if your property is protected on actual cash value basis, an "Allowance for Depreciation" is applied to the cost of a new TV based on the age of your destroyed TV. The result is you get a settlement amount less than the cost of a new TV. To buy a new TV you'll have to come up with the difference out of pocket. Not as good a deal for you

Clearly, insuring your personal property on a replacement cost basis is much better protection than actual cash value. Sometimes it costs a bit more, but not always. Make sure you know how your policy works and check the price both ways. Make the right decision for you.

4) Loss of Use:

If your home is badly damaged you won't be able to live in it while it's being fixed or replaced. That means you may have to pay rent somewhere while you're also paying your mortgage. The "Loss of Use" coverage on your home policy pays those additional expenses for you.

Your Declarations page may state a dollar limit for this coverage, or it may state a time limit. If there is a dollar limit, this is the most the insurance company will pay for these expenses. If there's a time limit, your insurance will pay all covered expenses regardless of the amount but only for the specified period.

5) Liability:

Your "Liability" coverage pays if someone sues you for their injuries due to a covered claim. When we think of such accidents we most commonly think of injuries that occur on your property, someone slips and falls, a dog bite, etc. However, the liability protection under your home policy extends beyond your property to your everyday life. For example, your home policy could also protect you if you knock someone over with a shopping cart at the grocery store.

Liability insurance is all about protecting your assets from someone who sues you. So, you should have at least as much liability insurance as your financial worth. However, more than that may be prudent, and you should discuss your needs and risks thoroughly with a licensed agent in our office. Your current liability limit will be stated on your Declarations page.

6) Medical Payments to Others:

This pays medical bills for a guest who is injured on your property or in another covered claim. The idea is to do the right thing for someone (e.g. pay their medical bills), and then hope they don't sue you. This protection is inexpensive, but could save you major hassles by preventing a lawsuit.

It's What's NOT Covered That Will Hurt You:

Imagine your home is damaged. You call your insurance agent to report the claim, and then you hear the worst news possible, "I'm sorry. That's not covered by your policy." Now, you have a real problem. The unfortunate truth is no insurance policy covers you for everything that could possibly happen to you or your property. However, with a little bit of understanding you can make sure you have the protection you want, and make sure your claims get paid by the insurance company.

Beware! It's Not Always Covered:

Just because you have an insurance policy that doesn't mean your home is covered for everything. Your home policy doesn't cover you against every "Cause of Loss". What's that? Fire is a cause of loss. High wind is a cause of loss. These are also known as "perils" in insurance terminology.

A standard home policy excludes many causes of loss. That is, it does NOT protect you from certain perils, such as: earthquake, flood and surface water, termite damage, and many more. That means if your home is damaged by one of these excluded perils your policy will not respond. You have no insurance against them.

If you want insurance against some of these perils, you can buy it, like earthquake or flood insurance. However, some excluded perils are not insurable, like insect damage. Be sure to discuss your policy exclusions with an agent in our office and buy the protection you really need. Don't be caught by surprise after the damage is done. It's too late to buy insurance then.

Special Limits On Personal Property:

As if your home policy wasn't complicated enough already it includes "Special Limits" of protection for some of your personal property. A "Special Limit" reduces the protection specifically available for certain types of property.

Property subject to a special limit typically includes: property used for business, cash & coin collections, jewelry and furs, guns, silverware, and more.

Additionally, some of these special limits apply only if the property is lost or stolen, making things just a little more confusing.

For example, the standard home policy typically includes only $1,000 of protection for stolen jewelry. If your $2,500 diamond engagement ring is stolen you'll get only $1,000 from the insurance company. Ouch! And, if the stone falls out of the ring and is lost, there may be NO coverage at all!

The bottom line is it's very important you fully discuss these conditions and special limits with your agent, and buy the protection you need. Otherwise, you could find yourself with a very nasty surprise: an unpaid claim!

Conducting Business At Home:

WARNING! Your home policy has very strict limits and rules about business conducted at home. The protection offered by your policy is severely limited if your claim arises from business activities. Your business property has very little coverage. And in some cases you may have no liability protection at all.

This is not something to take lightly and just assume everything will be fine. Be sure to discuss your home business activities with a licensed agent in our office to make sure you're still protected.

Other Exclusions and Options:

The standard home policy excludes protection for many things. But then the insurance company gives you an opportunity to buy some of them back.

Additionally, you have the option of increasing protection where you personally need it.

There are literally dozens of optional coverages available in your home policy. Here are some of the more common options available to you:

  • Identity Theft: Many home insurers now offer protection for Identity Theft in their home policies. This will help pay the expenses you incur to restore your identity if it's stolen.
  • Water & Sewage Backup: The standard home policy excludes damage caused by a water or sewage system backup. You can buy this protection if you want it.
  • Ordinance & Law: Pays the increased costs of repairing or rebuilding your home that are a result of changes in local building codes. For example, your home has single paned windows. After a loss, the local building department requires double-paned windows. This endorsement pays for the increased cost required by the new building code.

  • Packaged Endorsements: Often times an insurance company will package the optional coverages people most commonly buy into a single endorsement. That means for a lower price you can get several optional coverages added to your policy.

There are many more optional coverage and exclusion buybacks your agent can explain to you. Take a few moments to understand them and make good decisions about your protection.

Make sure you package your home and auto policies with one company. It could save you up to 35%

Tell Us About ECI Agency Inc.:

ECI Agency Inc., or ECI Agency, is the 2nd generation of the original ECI Agency Inc., which began in 1964 and was owned and operated by Mr. Earnie Cornelius.

Mr. Cornelius started his career in 1961 with Liberty Mutual selling personal lines. In 1964, Mr. Cornelius dreamed of having his own business and broke away from Liberty Mutual and started his own agency at the 10th & Meridian area in Oklahoma City. In 1966, Mr. Cornelius had the opportunity to merge with the Taylor Insurance Agency in Yukon. This started a continuation of the long respected tradition of high quality client service, providing commercial and personal lines of insurance protection. In 1969, Mr. Cornelius bought out Mr. Taylor's interest in the business and owned 100% of the agency in Yukon. In 1982, the oil bust hit Oklahoma and in 1985 Mr. Cornelius took his book of business and became an independent contractor with North American Insurance Agency. In 1993, Mr. Cornelius broke away from North American and moved the agency to Piedmont with only 1 CSR. In 1996 both Mr. Cornelius' wife, Peggy and daughter, Denise Johnson joined the agency. With already a long and accomplished career in the retail industry, Scott Cornelius purchased ECI in 2006 on the eve of Earnie's 70th birthday.

What Does ECI Agency Aim to Do?

ECI Agency, Inc. is dedicated to providing insurance products that provide quality protection and competitive pricing. We wish to establish a successful partnership with our clients, our team members, and the insurance companies we represent, that respects the interests and goals of each party. Success will be measured by our clients choosing us and referring us to others because of their belief in our ability to meet their expectations of competitive price, service with integrity and expertise in coverages.

After over 49 years in business, our #1 goal is to provide you with the BEST SERVICE, the most COMPETITIVE PRICES and the COVERAGES that you need.

What Services Does ECI Agency Provide?

As an independent agent, we have direct contracts with over 42 companies, and access to hundreds of other companies. We can provide you protection for your business, home, auto, life and/or health.

ECI Agency Contact Info:

You can contact us directly by phone at (405) 373-2977 or visit our award winning website www.eciagency.com and get an instant online quote.

You can also email us at info@eciagency.com or just come by our office at:

325 North Piedmont Road, Piedmont, OK

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