Home Owners Insurance
Home insurance policies are designed to protect your dwelling
and personal property against losses from the perils listed in your policy.
Knowing Your Policy Is VERY Important
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.
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.
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.
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.
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.
Insurance is a highly competitive business and the price paid by the consumer for homeowners insurance may vary by hundreds of dollars, depending on the insurance company with which the consumer intends to do business.
Companies offer several types of discounts, but they may not always offer the same discount or the same amount of discount. That is why the consumer should ask his or her insurance agent or company representative about any discounts that are available.
What should a prospective homeowners policy holder think about when assessing which policy to obtain? Here are several ideas for potentially lowering costs.
Compare the limits in the policy with the value of the possessions in the home at least once a year.
Policies should cover any major purchases or additions to the contents of the home. Remember that additions to the physical structure of the home should be reported to your agent or insurance company for a reevaluation of the limits of your policy. In addition, review your contents which may require a special scheduling on your policy. Such items include jewelry, watches, furs and computers to name a few. If you have sold or given away special schedule items, they should removed from your policy.
Are You Adequately Protected?
Because there are so many options and variables associated with home owners insurance we recommend that you 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.
For more information or a quote on homeowners insurance (click here) complete our consumer profile form and locate a professional in your area.InsBuyer helped over 4.2 million consumers with insurance related needs in 2010 and over 720,000 insurance quotes were requested for car insurance, home insurance, life insurance and health insurance. Thank you for letting us help you find affordable insurance.
Copyright © 1999 - 2011 Diversified Insurance Services / InsBuyer.com™