Home/House Insurance: Explanation Of Home/House Insurance

Home insurance will help you rebuild if you lose your home in a fire or some other catastrophic event. Home insurance coverage is divided into two categories: property damage to your house as a result of a predetermined list of events; and liability for you, your family and your pets in the event that a guest on your premises is injured or their property is damaged. Whether it is called home, house or homeowner’s insurance, it will cover your home for a wide range of damages and liabilities.

Home insurance can cover a lot of different circumstances. Be thorough and choose only the coverage you need to avoid unnecessary expense. There are a number of other steps you can take to keep your premium rate down:

  • Install smoke detectors, sprinklers and alarms.
  • Install surge protectors.
  • Install deadbolt locks and a burglar alarm.
  • Continually update and maintain your plumbing, electrical and heating systems to reduce the chances of water and fire damage.
  • Live next door to a fire station or adjacent to a fire hydrant.
  • Combine your home insurance with your other policies, such as your auto insurance.

Consult with your employer’s human resources department to see if your company offers home insurance to employees. Companies can qualify for a group discount plan, which means your premium may be significantly lower than a plan purchased directly from an insurer. Employers usually collect employee insurance premiums through a payroll deduction. Also approach any professional associations you belong to, and even your alumni, as they may also provide discounted group home insurance to their members.

Home/House Insurance: Explanation Of Home/House Insurance

If you are a retiree over 55 years of age, you may qualify for up to ten percent off your premium rate.

If you live in a neighborhood with a high crime rate, you may not qualify for standard home insurance. There is, however, a state government program called Fair Access to Insurance Requirements (FAIR) for people who do live in a high crime area and want to insure their home.

You can own a home without home insurance; however most lenders will require you to have a home insurance policy before they will approve your mortgage. Your bank wants to protect their investment; follow their professional lead and protect your investment too.

Home/House Insurance: What Does Home/House Insurance Cover?

If a vandal breaks into your home and destroys your personal belongings, your home insurance can provide the financial aid to replace and repair your possessions. Home insurance can cover a lot more too: if your home is damaged by nature or your cousin slips and falls on your icy pathway and decides to sue you for bodily injury.

Home insurance coverage standards run from basic coverage to coverage for special circumstances.

  1. Basic coverage includes damage to your home and contents in the event of several common perils: fire, wind, weight of snow, electrical or water damage due to certain wiring or plumbing situations, a falling object, crime, vehicle and aircraft damage, civil commotion and volcano damage. Your personal liability is also included.
  2. Broad coverage will cover the above perils as well as the inclusion of several others named by you, including war and nuclear incidents.
  3. Special coverage is called “all risk”, which means every peril is covered except a number of named perils that are excluded, which are usually flood and earthquake.

Standard home insurance will not cover the market value of your home; it will cover the replacement cost. It does not, however, include building code upgrades. If your house has not had an accident in 25 years and you suddenly need to rebuild, there is a good chance your contractor will need to do extensive work to bring your house up to current building code standards. You can add an endorsement to your policy to cover this extra expense.

To determine the amount of coverage you need:

  • Get a contractor’s rebuild and code upgrade estimate.
  • Inventory, photograph and tally the monetary value of your personal possessions.
  • Estimate the cost of temporary housing for you and your family during reconstruction.
  • Determine your home’s risk factor for possible liability.

You will need separate policies for floods, earthquakes and tornados. If you live in a flood zone, earthquake zone, or tornado alley, your rates will be higher. Even if your area is susceptible to severe storms, hail, high spring runoff, and other natural events, you still may want to consider this extra coverage. You can reduce your premium costs by following your state’s requirements for flood, earthquake and tornado damage prevention, such as installing hurricane shutters and shatter-proof glass, and reinforcing your roof.

There are many contingencies in a home. Therefore, there are many facets to home insurance. Take the time to get the right coverage.

Home/House Insurance: Who Needs Home/House Insurance?

Home/House Insurance: What Does Home/House Insurance Cover?

Buying a home is a major investment and as a homeowner, you need to protect your investment from damage; you also need to protect your family, pets, guests and assets. Home insurance is not a legal obligation but is definitely very important to most and a necessity to others.

Home insurance requires that the insured lives in the home permanently. If you own a home for investment purposes and rent it out to tenants, it is vital that your tenants have renters insurance. You can request that you, as the landlord, are included as an insured on your tenant’s renters policy. Renters insurance will cover you and your tenant from the same perils as home insurance as well as any lease agreement discrepancies, and any damages or liabilities incurred by the tenant.

If you own or rent a condominium, it is imperative you have condominium insurance. Condo associations have a master policy that covers the main building and common grounds; however, you need condo insurance for your personal property and for the items and events that your association does not cover.

Many homeowners put a large amount of time, money and energy into landscaping their yards. You can insure your gardens and shrubbery for about five percent of your home insurance and protect your investment from theft, fire, rioting and even falling aircraft. Wind damage and the effects of disease are not usually covered.

If you are a world traveler and like to bring your expensive clothing and jewelry, you can add off-premises coverage to your home insurance to cover your personal property anywhere in the world. Off-premises coverage also includes your credit cards. You can even add an endorsement to your policy to increase the amount of your indemnity for your expensive possessions.

Older homes usually require a special policy that bases coverage on market value rather than the cost to rebuild. Many insurers will not insure older plumbing and electricity, or your insurance company may require an inspection and a separate policy. If you own an historic home, you will be covered by the National Trust for Historic Preservation.

If you live in a flood or earthquake zone, you must purchase separate policies as these events are not covered in home insurance. The National Flood Insurance Program (NFIP) and programs such as the California Earthquake Authority are available to insure your home against these natural disasters.

Nature can be friend and foe to a home, and home insurance can help you plan for the damages nature can inflict.

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