Personal Lines Insurance

Core Coverage Breakdown

• Coverage A (Dwelling): Pays to repair or rebuild the physical structure of your home if damaged by covered perils (fire, windstorm, hail, etc.).
• Coverage B (Other Structures): Covers detached garages, sheds, fences, and pools.
• Coverage C (Personal Property): Replaces furniture, electronics, and clothing. We strongly recommend "Replacement Cost" rather than "Actual Cash Value" for this coverage.
• Coverage D (Loss of Use): Pays for hotels, rent, and food if your home is uninhabitable during repairs.
• Coverage E (Personal Liability): Pays legal defense and settlements if someone sues you for bodily injury or property damage (e.g., dog bites, slip and falls).
• Coverage F (Medical Payments): "No-fault" coverage to pay small medical bills for guests injured on your property to prevent lawsuits.

The HO-3 vs. HO-5 Difference

Most standard policies are HO-3s, which cover your *belongings* only on a "named peril" basis (you must prove what caused the damage). At Wedjat, we focus on the premier HO-5 policy, which covers both your home and belongings on an "open peril" basis, meaning everything is covered unless explicitly excluded.

Common Exclusions to Note:

Flood, Earthquake, and gradual wear-and-tear are explicitly excluded and require separate policies.

Renters Insurance (HO-4)

Your landlord's insurance only covers the building, not your possessions or your liability. HO-4 provides:

• Personal Property: Replacement of your laptop, furniture, and clothes in the event of fire, theft, or vandalism.
• Personal Liability: Defense costs if you accidentally start a kitchen fire that damages neighboring units, or if a guest sues you.
• Loss of Use: Pays for a hotel if the apartment building burns down.

Condo Insurance (HO-6)

Condo owners face a unique gap between what the Master HOA policy covers and what they own. HO-6 provides:

• Dwelling (Walls-In): Covers the fixtures, custom cabinets, flooring, and structural improvements inside your unit that the HOA policy excludes.
• Loss Assessment: Crucial coverage that pays your share if the HOA issues a special assessment to all owners for a massive liability claim or covered property damage to common areas.

The Anatomy of an Auto Policy

• Bodily Injury Liability (BI): The most important coverage. Pays the medical bills and legal settlements of *other* people if you cause an accident. State minimums are grossly inadequate; we recommend at least $250k/$500k limits.
• Property Damage Liability (PD): Pays to repair the vehicle you hit, or the city property (guardrails, light poles) you damage.
• Uninsured/Underinsured Motorist (UM/UIM): Protects *you*. If a driver with no insurance (or state minimum limits) hits you and puts you in the hospital, this coverage pays your medical bills and lost wages.
• Collision: Pays to repair your vehicle if you hit another car or a stationary object.
• Comprehensive (Other Than Collision): Pays to repair your vehicle if it is stolen, vandalized, catches fire, or is damaged by hail or an animal strike (e.g., hitting a deer).
• Personal Injury Protection (PIP): "No-fault" medical coverage for you and your passengers, regardless of who caused the accident.

The Ultimate Wealth Shield

An umbrella policy is the most cost-effective way to protect your net worth. It sits "on top" of your primary Home and Auto policies.

How it Works:

If you cause a severe multi-car accident and are sued for $1.5 Million, your auto insurance will only pay up to its limit (e.g., $250,000). Without an umbrella, the remaining $1.25 Million comes out of your personal pocket—meaning courts can seize your savings, place liens on your home, and garnish up to 25% of your future wages for decades.

A $2 Million Personal Umbrella steps in precisely when the auto limit exhausts, paying the remaining $1.25 Million, keeping your assets completely untouched.

Broader Coverage:

Umbrellas don't just provide higher limits; they provide broader coverage, often "dropping down" to cover claims excluded by your primary policies, such as libel, slander, defamation, and worldwide rental car liability.

The Most Common Excluded Peril

Homeowners insurance unequivocally excludes damage from rising surface water. If a nearby river breaches, a hurricane brings storm surge, or the city storm drains back up into your neighborhood, you have zero coverage unless you have a separate Flood Policy.

NFIP vs. Private Flood

• NFIP (FEMA): The government-backed program. It is highly reliable but strictly capped: maximum coverage of $250,000 for the dwelling and $100,000 for contents. It does not cover temporary living expenses (Loss of Use) or finished basements.
• Private Market Flood: At Wedjat, we heavily utilize private flood markets. These policies can cover the full replacement cost of a $2M+ home, cover finished basements, and provide Loss of Use coverage to pay for a hotel while your home is gutted and rebuilt.

Earth Movement Exclusion

Like flood, standard homeowners policies exclude all forms of "earth movement," including earthquakes, landslides, sinkholes, and mudflows. If an earthquake cracks your foundation or completely levels your home, an HO-3 policy pays nothing.

What an Earthquake Policy Covers:

• Dwelling Repair/Rebuild: Rebuilds the physical structure. Due to the catastrophic nature of the peril, these policies utilize a percentage deductible (usually 10% to 20% of the dwelling limit) rather than a flat dollar amount.
• Loss of Use: Critical coverage that pays for rent/hotels while your home is condemned and rebuilt.
• Building Code Upgrades: Pays the extra cost to rebuild the home to modern, strict seismic building codes, which is often vastly more expensive than the original construction.

The Homeowners "Sub-Limit" Trap

Your standard homeowners policy has strict "sub-limits" for certain categories of items if they are stolen or lost. For example, most policies will only pay a maximum of $1,500 for stolen jewelry, regardless of how much your belongings are actually worth.

The Solution: Scheduled Floaters

By scheduling your valuables, you bypass these sub-limits. Benefits include:

• Zero Deductible: If a $15,000 engagement ring is lost, the policy pays exactly $15,000.
• Mysterious Disappearance: Homeowners policies usually require proof of theft or a fire. A floater covers "mysterious disappearance"—meaning if the diamond falls out of the setting while you are swimming in the ocean, it is fully covered.
• Appraised Value Guarantee: The value is agreed upon before the loss occurs, ensuring no depreciation arguments with the adjuster.

Marine Risk for Individuals

Homeowners liability rarely extends to motorized watercraft with more than 50 horsepower. You need a dedicated policy.

• Hull Coverage: Pays to repair or replace the boat, motor, and trailer if damaged by collision, sinking, fire, or theft. High-end yacht policies provide "Agreed Value" coverage.
• Watercraft Liability: The most important coverage. Defends you if you cause a boating accident that injures a swimmer, water-skier, or damages another vessel or dock.
• Wreck Removal & Fuel Spill: Federal maritime law makes boat owners strictly liable for the massive costs of cleaning up a fuel spill or raising a sunken vessel from navigable waters. This policy covers those statutory liabilities.

More Than Just an Auto Policy

An RV is both a vehicle and a residence. A standard auto policy does not properly insure a motorhome. RV policies provide unique coverages:

• Vacation Liability: Acts like homeowners liability while the RV is parked at a campsite. If a guest trips down the RV steps and breaks an ankle, this pays the claim.
• Personal Effects Coverage: Standard auto policies do not cover laptops, clothing, or camping gear stored inside the vehicle. RV policies cover the contents inside the motorhome.
• Total Loss Replacement: For newer RVs, this guarantees a brand new, current model-year replacement if the RV is totaled within the first five years, avoiding steep depreciation.

Digital Wealth Protection

High-net-worth individuals are highly targeted by cybercriminals. Standard bank fraud guarantees often have loopholes, especially regarding wire transfers.

• Social Engineering & Wire Fraud: Reimburses stolen funds if you are tricked into wiring money to a fraudulent account (e.g., a hacker compromises your real estate agent's email during a home closing).
• Cyber Extortion: Pays ransom demands and provides elite IT forensics teams if a hacker locks your personal servers or threatens to release sensitive photos or financial data.
• Cyberbullying: Covers the cost of psychiatric services, temporary relocation, and reputation management PR firms if a family member is maliciously targeted online.

Protecting Large Investments in Single Days

Weddings and large anniversary parties often cost tens of thousands of dollars in non-refundable vendor deposits.

• Cancellation/Postponement: Reimburses the deposits paid to the venue, caterer, photographer, and band if the event must be canceled due to extreme weather (hurricanes), venue bankruptcy, or sudden severe illness of immediate family.
• Host Liquor Liability: Many venues require you to provide a $1M liability certificate before the event. This defends you if an intoxicated guest leaves the wedding and causes a severe auto accident.
• Special Attire & Rings: Reimburses the cost if the bridal gown is ruined or the wedding rings are lost before the ceremony.