| When it comes to homeowners insurance, you should | | | | such as garages, storage sheds, and fixtures attached |
| understand the different types of policies available so | | | | to the land such as fences, driveways, sidewalks, and |
| that you can make an informed decision. | | | | retaining walls. These kinds of structures are usually |
| Whether this is the first time you are shopping for a | | | | covered for about 10% of the amount of coverage |
| homeowners insurance policy or if you currently have | | | | you have on your home. If you believe you need more |
| a policy, it is always a good idea to be well educated | | | | coverage on these structures, make sure you talk to |
| to make sure you have your home properly and | | | | your insurance agent. If a detached structure is used |
| adequately covered. It's also important to know what | | | | for a business purpose, it is not covered under a |
| your deductible is. | | | | homeowners insurance policy. |
| Standardized HO (homeowners) insurance policies | | | | 3. Your Personal Belongings |
| include: | | | | Items such as furniture, clothing, and sports equipment |
| HO-A provides extremely limited actual cash value | | | | are covered if they are stolen or destroyed by insured |
| coverage for your home and contents. Only the types | | | | disasters. Some policies may have limited coverage |
| of damage specifically listed in the policy are covered. | | | | for small boats but not motorized vehicles unless they |
| HO-A amended policies provide more extensive | | | | are unlicensed and only used at your home. Some |
| coverage than the base HO-A but less coverage than | | | | belongings or items may have limited coverage. These |
| an HO-B. | | | | could include artwork, firearms, electronic data and |
| HO-B provides replacement cost coverage for most | | | | money. Usually you have 50% to 70% of the amount |
| types of insurable perils, except for exclusions. | | | | of insurance you have on the structure of your home. |
| HO-C policies provide the most extensive coverage. | | | | It is very important to conduct a home inventory to |
| When you shop for homeowners insurance, it is very | | | | determine if you have enough coverage to replace |
| important that you know what your policy covers. | | | | these belongings. |
| Your policy is designed to protect homeowners from | | | | Costly items such as silverware, jewelry, and furs are |
| insurable perils. These perils can include fire, theft, | | | | covered but there are usually dollar limits. Your |
| hurricanes and several other events. Your individual | | | | coverage even includes "accidental disappearance," |
| policy is determined by named perils and exclusions. | | | | meaning if you lose the item it is covered by your |
| Policies can differ from homeowner to homeowner. | | | | policy. However, there is no deductible. To insure |
| With your agent's help, you can determine how much | | | | expensive belongings for their full limits you need to |
| coverage you and your family need. | | | | buy a special personal property endorsement. |
| To receive full payment (minus your deductible) for a | | | | Trees, plants and shrubs are also covered under the |
| partial loss, you must insure your house for at least | | | | Personal Belongings part of your policy as long as they |
| 80% of its replacement cost. If you insure for less, the | | | | were damaged by insurable perils. They are not |
| insurance company will only pay for part of the | | | | covered if the damage occurred from wind or disease. |
| expense of a partial loss. If your home is destroyed | | | | The coverage is usually 5% of the insurance on your |
| and you only have actual cash value coverage, you | | | | home. |
| may not be able to completely rebuild with the claim | | | | Your policy also includes off-premise coverage |
| payment you receive. | | | | anywhere in the world. Sometimes the limit is 10% of |
| With any policy there are exclusions. Your policy | | | | the amount on the policy. |
| typically does not cover injuries to animals or damage | | | | Your policy includes up to $500.00 of coverage for |
| to motor vehicles or aircraft. You also are usually not | | | | unauthorized use of your credit cards. |
| covered for losses due to floods, mudslides, water | | | | 4. Additional Living Expenses (Or Loss of Use) |
| damage from sewer backups, damage from war or | | | | This part of your policy covers any additional |
| nuclear hazards, neglect, earthquakes, power failures, | | | | expenses you may have above and beyond your |
| seepage, dry rot or vermin. | | | | normal living expenses if you cannot live in your home |
| Homeowners insurance policies have different | | | | due to damage caused by insurable perils. This means |
| covered perils and exclusions. Check your policy | | | | hotel costs, meals, and other living expenses are |
| carefully so you understand the kinds and extent of | | | | covered while your home is being repaired or rebuilt. |
| coverage you have. | | | | The amount available to pay for these expenses is |
| Five Key Home Insurance Coverage Types | | | | usually equal to 20% of the insurance on your house. If |
| The rates you pay for your standard homeowners | | | | you rent part of your home, the loss of income will be |
| insurance policy includes the following essential types | | | | reimbursed. Policies differ company to company. Make |
| of coverage: | | | | sure you know what is covered. This part of your |
| Coverage for the structure of your home. | | | | insurance policy is to help you maintain a "normal |
| Coverage for other structures. | | | | standard of living." |
| Coverage for your personal belongings. | | | | 5. Liability Protection |
| Additional living expenses (ALE) also known as loss of | | | | Liability protection provides personal liability coverage |
| use. | | | | against lawsuits for bodily injuries or property damage |
| Liability protection. | | | | that you or other members of the family who live in |
| 1. The Structure of Your Home | | | | the home cause others on your property. It also |
| Coverage for the structure of your house is the part | | | | covers any damage or injury your pet may cause. |
| of your policy that includes repairs or rebuilding if your | | | | This part of your policy includes no-fault medical |
| home (dwelling) was damaged by fire, hurricane, hail, | | | | coverage so medical expenses are paid with no liability |
| lightning or other disasters listed in your policy. Your | | | | claim filed against you. The cost of defending you in |
| "dwelling" typically includes your house, attached | | | | court and court awards are covered, up to the limit of |
| structures and fixtures in your house such as built-in | | | | your policy. This coverage covers you, your family |
| appliances, plumbing, wiring, heating systems, and | | | | members, or your pets anywhere in the world. |
| permanently installed air-conditioning systems. This | | | | Home insurance experts highly recommend that you |
| coverage does not include damage caused by floods, | | | | buy at least $300,000 worth of protection. You can |
| earthquakes or routine wear and tear. When you buy | | | | also buy an umbrella or excess liability policy. This kind |
| your homeowners insurance, it is very important that | | | | of policy covers you for slander or libel claims. These |
| you purchase enough to rebuild your home. | | | | policies cost between $200 to $300 for every $1 |
| 2. Coverage for Other Structures | | | | million of additional coverage. |
| Most standard policies also cover detached structures | | | | |