Insurance
Homeowners
Insurance
Consumer’s
Guide to
LOUISIANA DEPARTMENT OF INSURANCE
James J. Donelon, Commissioner of Insurance
Homeowners
Chances are your home is the single most expensive item you will
ever purchase, and your most valuable investment. Every year insurance
companies pay more than $75 billion in claims resulting from losses
suffered due to res, hurricanes, robberies, dog bites and other incidents.
The trauma of damage to your property is stressful enough without
having to wonder if your homeowners insurance will cover the claim.
So, whatever your insurance needs, you should look for a company that
is nancially sound, has a history of providing good service and charges
a fair rate.
This guide outlines types of coverage and explains terms you should
know in order to nd the insurance provider and type of policy that
is right for you. It also explains general terms you should understand
when you have a claim. The information contained in this guide should
be of use to you whether you own or rent your residence.
Feel free to call us here at the Louisiana Department of Insurance
at 1-800-259-5300 if you have questions about any of the material in
this brochure.
A message from
Commissioner of Insurance
Jim Donelon
Updated 2016
This public document was produced by the Louisiana Department
of Insurance and is available online.
What’s Inside
Types of Homeowners Insurance
The Basic Form
The Broad Form
The Special Form
The Tenants Broad Form
The Comprehensive Form
Special Condominium Form
Other Important Insurance
Flood Insurance
The La.Citizens Property Insurance Corporation
Valuable Items Coverage
Renters Insurance
Business Property Insurance
Personal Liability Coverage
After the Policy is Purchased
Taking inventory of your home
Filing a claim
Working with the adjuster
Figuring out the costs
Cancellation by the company
Shopping Tips
Tips on Loss Prevention
Complaints
Insurance Shopping Worksheet and Insurance
Company Comparison Guide
12
11
10
7
4
2
11
Types of Homeowners Insurance
Homeowners Insurance is a “package” policy that covers both
property and liability claims. Property claims are made when loss or
damage occurs to your home or personal possessions. This coverage
extends to possessions that you carry for personal use when you travel.
Liability claims arise when someone else suffers a bodily injury or damage
to their property because of something you did or did not do. Liability
claims may result in a lawsuit against you.
There are six basic types of homeowners coverage that are
designed to provide varying amounts of protection. Different insurance
companies may give them different titles, but the perils they insure are
basically the same.
The Basic Form
The Basic Form protects your home and personal property such as
furniture, carpeting and personal belongings. The policy covers damage
due to re or lightning, removal of property endangered by peril,
windstorm or hail, vandalism or malicious mischief, theft, damage from
vehicles and aircraft, explosion, riot or civil commotion, glass breakage
and comprehensive liability.
Along with benets provided by the Basic Form, the Broad Form
insures your home and personal property against building collapse,
freezing of or accidental discharge of water or steam from within
plumbing, heating/air conditioning systems, domestic appliances, falling
objects, weight of ice, snow or sleet and rupture or bursting of hot
water heating systems. It also provides comprehensive personal liability
coverage.
The Broad Form
The Special Form covers your home against “all risks” except for
certain specied exclusions, such as oods and earthquakes. This policy
covers other structures (such as a garage) and all perils covered in the
Broad Form, damage to or loss of personal property and comprehensive
liability.
The special Form
2 Louisiana Department of Insurance
Consumer’s Guide to Homeowners Insurance 3
When deciding
which form is right for
you, be aware that there
are some properties and
perils that are excluded
from most homeowners
policies. Animals, birds,
fish, automobiles and
business property that are
away from the covered
premises are not covered
by most homeowners policies. Loss and damage caused by ood, surface
water, water that backs up through sewers or drains, earth movement,
nuclear damage and war are not covered. In some instances you can
purchase additional coverage for excluded items.
Personal liability and medical payments do not apply to operation
or ownership of any aircraft, automobile, recreational motor vehicle,
water craft powered by more than a 50-horsepower motor, or to bodily
injury or physical damage caused by an intentional act of the insured.
The TenanTs Broad Form
The Tenants Policy is a Broad Form policy that supplies coverage
for personal property only. This policy provides no coverage for the
dwelling.
The comprehensive Form
The Comprehensive Form insures a dwelling and personal property
against all risks except certain specied perils such as oods and
earthquakes. This is often the most expensive homeowners policy
because it covers so many potential losses.
special condominium Form
Special Condominium coverage is designed for condominium unit
owners and is not presently offered by all insurance companies. It
provides the basic coverage offered in the Tenants Form and provides
special protection needed by owners of condominium units. It insures
only the interior of the dwelling, not the structure itself.
Check with your producer to nd out if there is a hurricane
deductible written into your policy. There is a trend among insurance
companies in Louisiana to apply a hurricane deductible to homeowners
policies due to the frequency of storms in our state. For example, a two
percent hurricane deductible would require you to pay up to two percent
of the insured value of your home instead of the usual deductible
you pay when you have other types of losses. When considering the
purchase of a policy, keep in mind that most companies restrict the sale
of insurance once a hurricane or tropical storm is approaching.
Because homeowners policies in Louisiana do not provide coverage
for damage due to oods, it is important to look into getting a separate
ood insurance policy, no matter where you live. Ask your producer if
your insurance provider offers ood insurance policies that will provide
coverage for your house and its contents, or contact the National Flood
Insurance Program (NFIP) at 1-888-CALL FLOOD or visit www.
oodsmart.gov.
The federal government is responsible for the regulation and
distribution of ood insurance through FEMA.
The NFIP policy does not provide coverage in excess of $250,000
for your house and $100,000 for its contents. If you need more coverage,
you can purchase excess ood insurance through private insurers.
Check with your producer
or insurance company for
more information.
But don’t wait until
a storm is coming to
purchase ood insurance.
It may take 30 days after
purchase for a flood
insurance policy to go
into effect.
Flood insurance
Other Important Insurance
4 Louisiana Department of Insurance
The Louisiana Citizens Property Insurance Corporation was created
by the Legislature in 2003 to operate the high risk property insurance
pools.
Citizens serves as the insurer of last resort for consumers who are
unable to obtain property insurance in the regular insurance market.
Some homeowners policies, especially for property along the coast,
exclude coverage for wind and hail damage.
Citizens offers this type of supplemental coverage, along with other
basic property insurance. Any property and casualty producer is eligible
to place coverage with Citizens on your behalf.
The louisiana ciTizens properTy insurance corporaTion
Most policies limit the amount of reimbursement for valuable items,
such as jewelry, furs, silverware, guns, antiques and computer equipment.
If you have some particularly valuable items in these categories, you may
need to purchase additional coverage. This type of coverage is usually
not expensive and is based on the value of the item being insured.
Contact your insurance company or producer for more information.
valuaBle iTems coverage
Consumer’s Guide to Homeowners Insurance 5
home sharing renTal insurance
Home sharing or peer-to-peer rental companies, such as VRBO
or AirBnB, let people rent a room or an entire home to a stranger,
usually through a website or mobile app. Homeowner’s insurance isn’t
designed to cover most business uses of your home. If you’re earning
money from renting your home through a peer-to-peer company, the
insurance company may consider that a business use and you may not
be covered for damage to your home, damage to your neighbor’s home
caused by your renter, or any medical bills or injuries incurred by your
renters or their guests while they are on your property.
Before you list your home for rent, ask your insurance agent what
your policy covers.
• Your personal belongings are not protected by the landlord’s
insurance. Property owners insurance covers the actual building
and any contents belonging to the landlord, but seldom covers the
tenant’s possessions. Clarify this with your landlord before signing
a lease.
• Renters insurance is not very expensive. Some renters fail to insure
their personal possessions because they believe insurance is too
expensive, but in fact, renters insurance is typically available for as
little as $100 a year.
• Renters who live on the ground oor should also consider buying
ood insurance.
• Your landlord may not be liable if someone is injured within your
rented residence. You should check your renter’s agreement to
see if you will be held liable for injury or property damage that
occurs in your residence; if so you should consider getting renters
insurance.
• Renters policies normally pay only the actual cash value of your
losses, but replacement coverage is available.
• Although it is best if all roommates are on the same policy, it is
possible for each to purchase his or her own coverage. If you do
decide to get insurance alone, remember, only you will receive the
security of coverage.
renTers insurance
Many renters do not consider their insurance needs because they
believe only “home owners” need insurance. However, renters need
protection for their personal possessions and from liability.
If you operate a business out of your home, you should consider
purchasing a separate business insurance policy. Purchasing a business
insurance policy will protect your business property and your personal
liability if someone is injured in your home due to business activities.
For example, if you do not have business property insurance and
your house is burglarized, your homeowners policy will only pay a limited
amount for the replacement of your business property. Also, if someone
is injured as a result of your business activity, you could be held liable
to pay their medical bills and make restitution if you are sued.
Business properTy insurance
Some truths to remember about renters insurance:
6 Louisiana Department of Insurance
After you have purchased your homeowners policy, you need to
keep a copy in a re proof/water tight box or in a safe place away from
home, such as a safety deposit box. It is also important to make a list
of the possessions covered under your policy. It is much easier to do
an inventory of your home now, rather than having to sit down after a
loss and try to remember a lifetime worth of purchases. Make sure to
list any valuable items and their serial numbers along with the method
of acquisition (purchased, inherited or received as a gift), date purchased
and price or approximate value. This list should include furniture,
appliances, carpeting, jewelry, artwork, toys and the contents of your
closets, cabinets and drawers. Attach receipts if possible.
It is also a good idea to take photographs or videos of the outside
of your home, as well as the property contained inside. Include in your
video a verbal description of major assets, including their value. Keep
your list and photos or videos in a secure place with your policy.
After the Policy is Purchased
Taking invenTory oF your home
When you call your insurance company or producer about your
claim, keep a record of the conversation, including the person’s name
and the date and time of the call. The company will then submit a loss
form and an adjuster will be assigned to your claim. If you are unable
to stay in your home, let your insurance company or producer know
where you can be reached.
personal liaBiliTy coverage
A personal liability, or umbrella, policy pays liability limits above
those you can get on your homeowners or other basic liability policy.
If you are thinking of buying a personal liability policy, begin by
nding out the maximum amount of personal liability your homeowners
policy provides. Make sure you coordinate the liability limits so that the
umbrella policy covers any liability claim in excess of the amount your
basic policy will pay, up to the maximum limits of the policy.
Filing a claim
Consumer’s Guide to Homeowners Insurance 7
The settlement amount the insurance company offers, of course,
differs with each situation. However, it helps to know the two basic
ways to value your property.
• Actual Cash Value - the replacement cost of the item minus
depreciation. For example, if a new television set costs $500 and your
7-year-old television set is damaged in a re, you may end up receiving
only $250 because of depreciation of your television’s value over
time.
Figuring ouT The cosTs
In most cases, you may need to make
temporary repairs to prevent further damage to
your property from the weather or from looting.
This would include boarding up windows and
placing plastic over the roof if it is leaking. If
you make temporary repairs, keep a list of all work
done and save receipts for all materials used. Do
not sign any deals with contractors until you have
spoken with your insurance company.
The adjuster will contact you to make arrangements to inspect your
property. Be present when the adjuster comes, and ask for identication.
Have your insurance policy, your list of possessions and any photos or
video ready when the adjuster arrives. This will make the adjuster’s job
easier and help settle your claim sooner.
The adjuster will then make a repair estimate of the damage to
your home and property. If you
cannot come to an agreement
with the adjuster over what needs
to be repaired or replaced, do
not accept an unfair settlement.
Contact your insurance company
or call us here at the Department
of Insurance, 1-800-259-5300.
Working WiTh The adjusTer
8 Louisiana Department of Insurance
Check your policy to see which kind of coverage you currently
have. If you have actual cash value and would prefer replacement
coverage, it may be added to your policy for an increase in your premium
of about 10 to 15 percent.
After you have received your policy you should read your cancellation
provisions, as they may be more complicated than you think. It is
important to understand when and how the company can or cannot
cancel or refuse to renew your policy.
First of all, if your insurance company decides it wants to cancel
or not renew your policy, you have the right to know why. If you make
a written request for the reason of cancellation, the company must
respond within six months and specify in writing the reason for the
cancellation or refusal to renew.
You should be aware that your insurance company cannot cancel,
refuse to renew or increase the amount of the premium on your
homeowners policy based solely on a loss caused by an “Act of God.”
An “Act of God” is dened as an incident due directly to natural causes
and exclusively without human intervention. However, the company
may make such changes to your policy due to an “Act of God” if they
make the changes on an area-wide rating basis at the beginning of a
new policy period.
Your insurance company cannot, however, cancel, refuse to issue,
fail to renew or increase the deductible of your homeowners policy if it
has been in effect and renewed for more than three years, unless certain
conditions apply. Such conditions include: nonpayment of premium,
insurance fraud committed by the insured, a material change in the
insured risk, two or more claims within a period of three years, or if the
continuation of your policy endangers the solvency (nancial stability)
of the company.
cancellaTion By The company
• Replacement Coverage - the cost of replacing an item without
deducting for depreciation. For example, if the current cost of a
television similar to the one you bought seven years ago is $500, you
will receive the full $500. Most policies require you to actually replace
the item in order to receive reimbursement.
Consumer’s Guide to Homeowners Insurance 9
When shopping for homeowners insurance, keep these basic tips
in mind:
Shopping Tips
• Don’t take risks with your new home. You should use the same
care in shopping for your homeowners insurance as you did when
shopping for your home. After a storm, re or other calamity, the
last thing you want to hear is that your insurance company is not
nancially stable enough to cover your claim or that you don’t have
the proper coverage in the right amounts.
• Shop till you drop. Don’t just buy the cheapest policy you can nd.
There are other factors you should weigh, such as the credibility of
the company.
• Remember deductibles. Homeowners policies in Louisiana
carry a basic deductible depending upon your insurance company.
Keep in mind that a higher deductible means higher out-of-pocket
expense in the event of a loss. Depending on the company, your
policy may have a separate hurricane, named storm or wind and
hail deductible.
• Buy only what you need. Your company or producer may
suggest a higher policy limit than is actually necessary to cover
your needs. The fact is, the amount of insurance on your home
should not exceed the cost of replacement if it is totally destroyed.
However, you need to insure your home for at least 80 percent of
its replacement value.
• Burglar proof. You may qualify for premium discounts if you
install antitheft devices such as burglar alarms, deadbolt locks and
secondary locking devices. Ask your producer for more specic
information.
• Compare them all. Be sure to compare similar policies to learn
which is the most reasonable. Remember, there are several different
types of homeowners policies available.
• Keep in mind company underwriting. Companies have certain
underwriting characteristics they use to determine eligibility. Some
will look at such things as: the condition of the home, whether or
not there is a pool, and the kinds of pets you have.
10 Louisiana Department of Insurance
If you believe an insurance company has improperly refused to
issue or renew your policy, or refused to pay all or part of your claim,
you should ask questions rst and then complain if necessary.
Your rst step should be to contact your adjuster, producer or other
company representative. Many times a mistake has been made and will
be corrected when you call. When making such a contact, be prepared
to give your name, address, telephone number, policy number, type of
policy and nature of your complaint.
If you do not receive a satisfactory
response from your company,
adjuster or producer, you may seek
help from the Louisiana Department
of Insurance by calling us toll free
at 1-800-259-5300. You can also
visit the Department website at
www.ldi.la.gov for more information.
There are steps you can take to help prevent loss and keep your
rates as low as possible:
Tips on Loss Prevention
• Install smoke and heat detectors near sleeping areas.
• Keep your house free of trash piles, oily rags and combustible
materials.
• Check lamps, cords and light switches to make sure there is no
faulty wiring.
• Practice re drills at home, and make sure all family members
(especially children) know what to do in case of a re.
• Keep matches and lighters away from children.
• Do not smoke in bed.
• Install adequate locks on the doors and windows of your home.
• When away from home, suspend delivery on your mail and
newspapers or ask a friend or neighbor to collect them for you
daily.
Complaints
Consumer’s Guide to Homeowners Insurance 11
Electronic burglar alarm system
Burglar-proong-deadboltlocks,secondarylockingdevices,etc.
Mandatory discounts for hoMes Meeting eligibility standards:
1 . replaceMent cost of your house $
(Doesnotincludethevalueoftheland,
foundation, landscaping, septic system or water well.)
2. replaceMent cost of your household contents $
3. square footage of your house
4. policy forM that you want
(See pages 2-3 for descriptions.)
discount checklist
Checkthediscountsforwhichyoumightbeeligible.
5. deductible
($250 or 1% replacement cost of your house.)
$
insurance shopping worksheet
Usethisworksheettorecordinformationaproducerorcompanywillneedin
ordertogiveyouanaccuratepremiumquotation.Remember,thecompany
isobligatedbylawtoprovideyouwiththereasonfortherateyouaregiven
uponrequest.
fire and sMoke alarM systeMs and burglar alarM systeMs that do
not qualify for the Mandatory discount:
Central station
Remote alarm
Local alarm
other discounts:
Combinationre,smokeandburglaralarmsystems
Automaticsprinklersystems
Fire extinguishers
Building features:
Age of the house
Noncombustible roof
Care & condition of premises
Lossexperienceforthreeconsecutiveyears
Companion policy in same company or group
Houseinsuredtofullreplacementvalue
Senior citizens discount
12 Louisiana Department of Insurance
Usethischarttorecordthepricesquotedbyeachcompany
or producer you contact.
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
naMe of coMpany:
Annual Premium $
Discounts Offered
insurance coMpany coMparison guide
Louisiana Department of Insurance
OfceoftheCommissioner
P.O. Box 94214
Baton Rouge, LA 70804-9214
