Home owners insurance policies are designed to protect your dwelling
and personal property against losses from the perils listed in your
policy.
Home owners insurance rates vary widely based on geographic location.
Areas prone to hurricanes, floods, hail, earthquakes, fires and other
natural disasters will generally have higher rates. Even the distance to
the nearest fire department or fire hydrant can have an impact on your
home owners insurance rates.
Coverage
for Property and Possessions
Damage to the dwelling and the contents could be the biggest
unexpected disaster awaiting a homeowner who has less coverage than
needed. Most policies provide a stated maximum amount of coverage for
the dwelling and another amount for contents.
Generally, dwelling coverage is based on replacement cost, which
means that in the event of a total loss, the policy will provide
reimbursement, up to the policy limit, to replace the structure.
Ideally, a homeowner should buy enough insurance to completely rebuild
the home, known as replacement value. This figure may not be the home's
actual market value or what the owner originally paid for the home. This
is especially true in a depressed or an inflated market or if the home
is simply not replaceable to its condition prior to the loss.
Replacement cost policies, which may pay over the policy limit to
rebuild the home, may be available from your insurer.
To determine how much insurance to purchase, an accurate appraisal of
the home for replacement cost should be made. Working with your
insurance company is important in this process. Most insurers recommend
or require that a homeowner insure the dwelling for 100 percent of its
full replacement value. Some homes, very unique ones such as national
register-types or very elaborate ones, cannot be insured for exact
replacement since some features are not replaceable in either
workmanship, materials or practical costs. The insurer and/or the agent
is the best source for these issues.
Coverage for personal property is different. Most policies provide
actual cash value coverage for contents which includes depreciation, or
full value contents without depreciation. Actual cash value means that
if a power surge blows out a 10-year-old television set, the homeowner
should know what to expect. Unlike full value contents coverage, which
would essentially provide a new television set, actual cash value
coverage allows the insurance company to calculate the useful life of
the item and then depreciate the item to present value. A depreciated
10-year-old television set would be insured for only a fraction of its
original cost. A homeowner may want to consider replacement cost
coverage to be sure that the contents are adequately insured.
In addition to making sure that contents are covered for replacement
cost rather than actual cash value, homeowners should purchase
additional coverage for items that would ordinarily be subject to loss
limitations. Virtually all policies cover contents loss up to the policy
limit for items that include furniture, clothing, toys, accessories such
as lamps and other items which are used for decor. Explicit limitations
are set in the policy for high-cost items such as jewelry, fine art,
furs, electronics, collectibles, oriental rugs and antiques. If a thief
comes in and steals a two-carat engagement ring, it will not be covered
well enough without what is commonly known as a personal property rider
to cover specific, costly items. For more information on home owners
insurance visit our specialist site below.
Home
Owners Liability Coverage
Liability insurance is very important to a homeowner's coverage
because it helps protect the owner and the family from financial
disaster if someone files a claim against the homeowner's policy, sues
the homeowner or if the courts hold the homeowner legally responsible
for someone else's injury or property damage. The standard liability
limit for most policies is $100,000, but many people believe that
additional protection is needed , especially if the homeowner has
sizable assets.
For a small increase in premium, an additional $300,000 to $500,000
may be obtained. Liability coverage protects in three ways: Personal
liability, damage to the property of others, and medical expenses for
injury to others.
Another way to protect one's assets is to consider an Umbrella Policy
which usually adds $1 million (or possibly more) in excess liability
coverage to the homeowner's property and automobile insurance policies.
It also covers claims excluded from most basic policies such as libel,
slander, defamation and mental anguish.
For example, most policies provide liability coverage that covers not
only accidents that occur on the insured property but accidents that
occur elsewhere. If the family dog bites a neighbor in front of another
neighbor's house, for example, the dog owner's homeowner's policy will
usually compensate the neighbor for injuries and necessary medical
expenses. For more information on home owners insurance visit our
specialist site below.
Theft Off Premises
Most policies automatically insure against the loss of personal
property even if that property is not on the insured premises when it is
lost. If one goes to the airport with several suitcases and they are
stolen, this is probably covered. Talk with your agent and/or your
insurance company for details.
Additional Living Expenses
Another automatic benefit of which many homeowners are unaware is
coverage for living expenses if the covered premises is damaged to the
point of being uninhabitable. Not only should the policy pay for the
cost to repair the damage to the dwelling, but it should also reimburse
the homeowner for the additional expenses of living elsewhere while the
repairs are being made. For more information and rates on home owners
insurance visit our specialist site below.
What Can A Homeowner
Do To Be Prepared?
How does someone find out what is and what is not
covered? Read the policy carefully. It's not likely to be fun reading,
but the good news is that if one reads and understands his or her policy
before it is needed, this knowledge may save unexpected financial losses
should a problem occur. It is always best to talk with one's insurance
agent or the company that issued the policy for details.
Understanding your homeowners insurance policy is best handled before
a claim is made. In the case of the contents, an inventory of items room
by room is important to have with information such as the date
purchased, serial number, the original cost of each item and a brief
description. Video tape or still photos is very helpful along with the
inventory. These items should be stored in a safe place such as a safety
deposit box in a bank or savings and loan institution and not in the
home because if the home is destroyed, the chances are the inventory and
related photos or tape may also be destroyed.
Are You Adequately Protected?
Because there are so many options and variables associated with home
owners insurance we recommend that you use our specialist page to find a
company in your area that specializes in home owner insurance. It is
very possible to save hundreds of dollars a year by simply shopping
rates and coverage. Visit our page on 12
ways to lower
your homeowner's insurance.
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