Home Insurance
Homeowners insurance is one of those things that is not required but is necessary. A standard policy provides you protection against many disasters to your home mortgage with an exception a few. The insurance also gives you liability protection, in case of any injuries and real estate property damage caused by you or your family members to other people. Luckily, the policy covers damage caused by your household pets. Certain damage and special cases require supplemental homeowners insurance coverage:
|
Supplemental Insurance |
What is it |
|
Earthquake insurance |
· Covers damage due to earthquakes
· Available from private insurance companies rather than from the federal government
· Protects home structure and personal possessions from the earthquake cracking and shaking
· Your standard homeowner policy covers damage from fire and water damage due to burst gas and water pipes |
|
Flood insurance |
· Covers all damage caused by flood
· Rather inexpensive coverage
· Reimbursement for flood damages not contingent upon being declared a Federal disaster area
· Unlike other Federal disaster relief packages, your covered losses are fully paid
· Available from the National Flood Insurance Program (NFIP)
· NFIP flood insurance is guaranteed by the Federal government
· Insurance can be obtained through local insurance representatives
· You can call the NFIP AT 1-800-427-4661, for more information |
|
Endorsements |
· Provides extra coverage for certain items at an extra premium
· Endorsements increase or enlarge coverage on these items
· Endorsements can be used to enhance protection for items such as stamp or coin collections, art, computer and camera equipment, jewelry, television and radio satellite antennas and dishes, furs, etc. |
|
Umbrella |
· Provides enhanced liability protection |
Homeowner policies provide property and liability coverage and resulting loss from damage. Here are some basic types of home insurance policies:
|
Home Insurance Policies |
What is it |
|
HO-1
|
· Your basic homeowners policy
· Provides your home protection against 11 different perils |
|
HO-2 |
· More expansive homeowners policy
· Provides your home protection against 17 different perils
· Your premiums are about 5 percent to 10 percent higher than a HO-1 policy |
|
HO-3 |
· Particular homeowners policy
· Provides your home protection against all perils except perils excluded by your policy
· Your premiums are about 10 percent to 15 percent higher than a HO-1 policy |
|
HO-4 |
· Covers renters, renters policy
· Provides your home protection against 17 different perils, includes liability
· Does not insure the home itself |
|
HO-5 |
· Comprehensive homeowners policy
· Excludes damage from earthquake, floods, and wars |
|
HO-6 |
· Coverage for co-ops or condominiums
· Covers personal property, liability, and certain unit improvements
· Unit structure usually covered under the association’s insurance |
|
HO-8 |
· Homeowners policy for older houses
· Provides your home protection against 11 different perils which include repair costs or actual cash value not replacement costs
· Better suited for older homes whose market value is less than rebuilding costs |
A homeowner policy categorizes perils into: named perils and open perils. Perils express covered causes of loss.
|
Named Perils |
Open Perils |
|
Lightening |
Accidental overflow of water |
|
Aircraft |
Falling objects |
|
Fire |
weight of ice/snow/sleet |
|
Theft |
burning |
|
Hail |
Bulging |
|
Smoke |
Sudden cracking |
|
Vehicles, etc |
Freezing, etc |
When beginning the homeowners insurance application process, be prepared to provide extensive information to the insurance company. The insurance company will do a thorough evaluation of your personal credit, criminal, insurance, and employment history; as wells, confirm your current occupational and marital status, among other things. It is important to have your information at hand when discussing options with an insurance company to make the process of getting a homeowner insurance policy fast and easy.