“Akamai Money” seeks out local experts to answer questions about business in Hawaii. If you have an issue you would like us to tackle, please email it to business@staradvertiser.com and put “Akamai Money” in the subject line.

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QUESTION: What are the most important things to consider when purchasing homeowners insurance?

ANSWER: The most critical considerations are the actual replacement value of your home and the personal belongings within it. Homeowners insurance coverage should be robust enough to replace your home and property in the event of a total loss. How much would it cost to replace your home and all of your belongings if they were lost through an event such as a fire? This includes estimated reconstruction costs, as well as replacement of furniture, jewelry, collectibles — even items such as your surfboard. Finally, consider how much of a deductible you can afford; if you face a disaster, how much can you afford to pay on your claim before your insurance kicks in?

Q: What type of information should I have on hand when getting a quote for homeowners insurance?

A: To receive a home quote, (insurers) need detailed information on your home, including address, building type (single-family, townhouse or condo, for example), construction type (like single- or double-wall), square footage, roof age, information on any major improvements to plumbing or electrical systems, and year built. If it’s a newly purchased home, we would also request the lender to provide a mortgage clause. We will ask about homeowners insurance claims in the recent past and about a current policy, if one exists. We will also ask about liability coverage needs, which may be required by the lender. And we will also ask about the types of safety features that your home may possess, including security systems or fire prevention devices.

Q: What is the difference between property protection and liability protection?

A: A homeowners policy consists of two major components: property protection and liability protection. Property protection insures your home and property from such perils as fire, theft and vandalism. It also protects your personal property while you are away from home both in the United States and abroad. For example, if you are traveling overseas and your camera is stolen, it would be covered since it is considered personal property.

Liability protection insures you if someone is injured on your property. For example, if you have a guest over for dinner and he/she falls and is injured in your home, and then files a liability lawsuit against you.

Q: How do I determine how much homeowners insurance coverage I need?

A: In many situations, lenders will dictate the amount of homeowners insurance coverage required as security for their investment. A mortgage requires homeowners insurance to pay for at least 80 percent of the home’s value or up to 100 percent of the mortgage itself.

If you own a condominium, it’s especially imperative to verify what amount of coverage is adequate with both your mortgage lender and the condominium association, as it will vary depending on the lender’s requirements as well as the condominium’s master policy.

Q: What is umbrella insurance?

A: A personal umbrella insurance policy provides coverage for claims over and above the limits afforded by your existing insurance policies — this includes excess liability judgments for loss, injury or even death caused by negligent acts.

Umbrella coverage can be used to protect your current assets and future earnings in the event of a catastrophic loss.

Purchasing umbrella insurance may be a good choice if you have a young driver in your household, operate personal watercraft or recreational vehicles, or if you own a home with a swimming pool. Personal umbrella insurance comes with varying limits — your insurance agent can help you determine whether you should consider a personal umbrella policy.

Q: What are some tips to lower the cost of homeowners insurance?

A: Bundling is one clear way to save money on insurance. At DTRIC we offer up to 25 percent off homeowners insurance by bundling home and auto insurance together through our HomeAuto Advantage. We also offer other money-saving discounts if you have maintained continuous homeowners insurance with a valid carrier, or if you have remained loss-free for at least three consecutive years.

There are also discounts to reward you for taking steps to make your home safer, such as installing smoke detectors or home security features like burglar alarms and deadbolts. A knowledgeable insurance agent can assist you in finding the right homeowners insurance for your needs.

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Interviewed by Allison Schaefers, Star-Advertiser