Home Insurance
Homeowners insurance provides coverage for damage to your home and other structures on your property. It also provides coverage for your household contents and personal belongings.
Personal Liability - It protects you against lawsuits involving the injuries that occurred on and off your property.
Why is it necessary?
- To rebuild your home if it gets damaged or destroyed.
- To replace the stolen property from your home.
What kind of insurance you need to buy?
It depends on the type of risk.
Some home owners may be affected by fire or theft.
Some home owners may be affected by snow, earthquake and tornado’s.
Types of home insurance
There are six variations of home owner’s policies that you can choose from, ranging from HO-1 to HO-8.
HO-1: This covers your home valuable objects. Example: Painting
HO-2: It is similar to HO- 1. It covers any specific portion of house. It is often called perils policy.
HO-3: It is often called “all risk” of “open perils” policy. It covers all aspects of the home structure and its contents as well as any liability that may arise from daily use, as well as any visitors who may encounter accident or injury on the premises.
HO-4: This coverage is similar to the HO - 6. It is called renters insurance or renter’s coverage.
HO-5: Similar to HO - 3. Difference is that it covers a wider breadth and depth of incidents and losses than an HO-3.
HO-6: It is also known as Condominium coverage. It covers all your valuables within the home from theft, fire or water damage or other forms of loss.
HO-8: It is called “Older Home” Insurance. It lets house owners with higher replacement cost than the market value. It insures them at a lower market value rate.
Once you decide to buy Home owner Insurance you need to know how much insurance you will need for your home.
There are two types of Home Owners Insurance
Actual cash Value:It is cheapest home insurance policy. So experts avoid this policy.
Why experts avoid this policy?
Suppose you buy a policy which covers your house $10000 when your house value is $10000. If after some year your house valuation increase to $12000. But your coverage amount will be same when you buy the policy.
Replacement cost: In this type of coverage policy amount rise with the rate of inflation. $5 - $ 30 to your annual premium.
Make sure you get all the facts about the policy you think is right for you.
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Posted on June 14th, 2007 by admin
Filed under: Home Insurance Tips, home insurance, insurance, subikar, ampminsure, insurance blog, insurance tips, home owner insurance, insure your home, insure my home
Condominium Insurance:
Its true that condominium insurance insures all the valuables at your home from theft, fire or water damage or other forms of loss. These valuables may include paintings, sculptures, jewelery or precious stones but each of these items have to be enlisted with your insurer. Any valuable which has not been evaluated with the insurer prior to the insurance agreement would not be considered for the coverage. Evaluating of these valuables indicate a clear depiction of the description of these items individually in terms of certain factors eg. their price, weight, age and so on. Thus even when a mishap has occurred it becomes easier for the adjuster to ascertain the real worth of the damaged item as compared to its initial worth. The value of the reimbursement would be exactly proportional to the extent of the damage caused to that particular listed item.
Don’t forget home insurance provides liability and medical protection. The cost to carry $500,000 versus $100,000 liability coverage is minimal.
Guaranteed or extended replacement cost:
Apart from actual cash value coverage and replacement cost coverage, there is another type of coverage available for the home owners, it is called the guaranteed or extended replacement cost coverage.
Guaranteed cost coverage offers the highest level of protection. it will meet all the expenses of re-construction even if it crosses your coverage limit. Naturally, it is the most expensive form of coverage.
Extended cost coverage pays 20% to 25% over the coverage limit for re-building your home, i.e.if you have a $1,00,000 policy, your coverage will get extended to $1,20,000 for the 20% extended cost coverage. Many experts now recommend extended cost coverage for its flexibility. It works good as a hedge against inflation.
Truly, that might just be the thing we are looking for!
To many of us the word ‘insurance’ suggests a way of getting things replaced in terms of its worth-in-kind. Hence, by achieving a partial substitution for the same, we are not actually relieved out of the situation. Thus, I feel it would be worthy of getting something in place that assures the face value of things, more so when it comes to something like insuring my sweet home!
Subikar,
the home insurance does provide protection in multiple areas but the problem is that it takes a lot of money it is very expensive
Many people insure both their home and the land the home is on. Instead of insuring both your home and the land it is on, insure only your home if you want to save.
excellent post, it’s like the whole information you need as a home owner. thanks.
That’s a lot to think about for a property. I personally don’t like the idea of owning a condo. Generally, people don’t like insurance because they are thinking of the present time and not the future. Because at the present time, it seems like a waste of money
There is so much to know about insurance. One can never have too much. I recently tripled my auto insurance for about $2/mo.
With everything that is going on, seems home owners insurance is especially tricky and one must ask many question to get the coverage they need.
My parents in New Jersey have always had home insurance and expected that to cover them for everything. Sure enough, the house was flooded and their home insurance didn’t cover it, they were out thousands.
Of course, they thought that they didn’t live in a ‘flood zone’, but they learned their lesson. They now have flood insurance.
Interesting to know.