Indiana Homeowners Insurance Guide

Homeowners insurance laws can be similar among the states, but homeowners must familiarize themselves with their own state’s regulations, as differences always exist. The Indiana Department of Insurance enforces the insurance laws of the Crossroads of America, and it provides assistance in filing consumer complaints against insurance companies.

Indiana Homeowners Insurance Laws

As a homeowner, you should choose coverage that protects your home, which is, after all, your biggest and most important investment. You need a policy that will give you the security of knowing you will be able to recover in the event of a total loss of your home.

The Hoosier State suggests insuring your home for at least 80% of its replacement value, as less than that amount will result in a settlement of actual cash value, which takes depreciation into account. Your mortgage lender will also have certain coverage requirements, and you should look at additional coverages offered by your insurer, such as flood insurance. Farm policies are offered independently of homeowner policies, but its format is quite similar.

Most Indiana homeowner policies have a $500 deductible, and personal liability coverage is usually included. This protects you from claims for injuries and property of others damaged while on your property, as well as any injuries or damages you might cause someone when you are away from your home.

Flood Insurance

The floods in 2008 brought up a number of questions for Indiana residents. While homeowners insurance policies do not cover flood damage, a Hydrostatic Pressure Endorsement is offered by some companies, which insures property for collapse of the building due to the pressure of floodwater on the home’s foundation. While some policies also cover damage caused by sewer or drain backup, this coverage does not apply in the event the backup is caused by flood water. Flood insurance is offered only through the federal government as a supplement to your homeowners insurance. If you are thinking of purchasing flood insurance, keep in mind that coverage does not go into effect until 30 days after purchase.

What Types of Policies Are Available?

• Actual cash value (ACV) - A policy with ACV pays the replacement cost less depreciation, which is the decrease in property value caused by age or wear and tear. You are paid the property’s actual worth at the time just prior to the loss, not the cost of that property if you were to buy it new today. Remember that, unless you insure your home for at least 80% of its value, you will automatically get ACV in the settlement of your claim.
• Replacement cost - Unlike ACV, this type pays the cost of rebuilding or replacing the property with the same quality materials in today’s prices.
• Personal Property - Personal possessions are typically insured for half of the structure’s limit. In other words, if your home is insured for $200,000, the personal property limit could be $100,000. Your policy will also grant some coverage to your personal belongings while they are away from your home. This is usually 10% of your basic protection on the home’s contents, or $1,000, whichever amount is larger.

If you need additional assistance concerning homeowners insurance in Indiana, visit IDOI Property Insurance at the Indiana Department of Insurance’s website.