Homeowner's Insurance
October 17, 2007
Having a policy of homeowners insurance is an important expense for the owner of any residential property. At the time of a purchase of that first home, the buyer (if not purchasing "all cash") will be required to secure a homeowner insurance policy prior to a lender funding a loan. From that time forward, it will be necessary to renew the insurance policy every year.
There are four essential types of coverage in the standard homeowners insurance policy.
1)The repair or rebuilding of your house if it is damaged by fire, or other disasters listed in the policy. It will not pay for damage caused by flood, earthquake or normal wear and tear. Additional policies are available if you want flood or earthquake protection. It is important that the amount of coverage includes building code compliance even though this may up your premium.
2) Your personal belongings are covered if they are stolen or damaged by fire or other covered disasters up to an amount that is usually 50% to 70% of the amount of insurance you have on your home. You do need to assess the value of jewelry, silver, furs as typically there are limits if they are stolen - $1,000 to $2,000). You can purchase a special property endorsement at insure these items at their appraised value.
3) You will also receive liability protection from a standard policy of homeowners insurance. It protects against lawsuits for bodily injury or property damage that you or your family cause to other people. It may also cover damage caused by your pets to other person's property. The most common limit is $100,000 but you can secure a greater amount. An inexpensive way to have greater liability protection is to purchase an "umbrella" policy which generally cost between $200 to $500 per year for up to $1 million in protection.
4)If your home is damaged to the extent that you can no longer live there, the standard policy will also include the additional costs of living away from home.
Always ask your insurance agent what the dollar limits are on each of these standard coverages. Also check out the amount of the deductible.
A few tips: Remember that the insurance does not cover the value of the land. Your coverage needs to be the market value of your home minus the value of the land.
Select a deductible that you can afford without involving the insurance company. (Check with your lender because most lenders want a $500 deductible rather than a higher amount.)
Seriously consider an umbrella liability policy. Generally the coverage is less expensive than increasing liability limits in a standard policy.
Know your policy!!!!
Having a policy of homeowners insurance is an important expense for the owner of any residential property. At the time of a purchase of that first home, the buyer (if not purchasing "all cash") will be required to secure a homeowner insurance policy prior to a lender funding a loan. From that time forward, it will be necessary to renew the insurance policy every year.
There are four essential types of coverage in the standard homeowners insurance policy.
1)The repair or rebuilding of your house if it is damaged by fire, or other disasters listed in the policy. It will not pay for damage caused by flood, earthquake or normal wear and tear. Additional policies are available if you want flood or earthquake protection. It is important that the amount of coverage includes building code compliance even though this may up your premium.
2) Your personal belongings are covered if they are stolen or damaged by fire or other covered disasters up to an amount that is usually 50% to 70% of the amount of insurance you have on your home. You do need to assess the value of jewelry, silver, furs as typically there are limits if they are stolen - $1,000 to $2,000). You can purchase a special property endorsement at insure these items at their appraised value.
3) You will also receive liability protection from a standard policy of homeowners insurance. It protects against lawsuits for bodily injury or property damage that you or your family cause to other people. It may also cover damage caused by your pets to other person's property. The most common limit is $100,000 but you can secure a greater amount. An inexpensive way to have greater liability protection is to purchase an "umbrella" policy which generally cost between $200 to $500 per year for up to $1 million in protection.
4)If your home is damaged to the extent that you can no longer live there, the standard policy will also include the additional costs of living away from home.
Always ask your insurance agent what the dollar limits are on each of these standard coverages. Also check out the amount of the deductible.
A few tips: Remember that the insurance does not cover the value of the land. Your coverage needs to be the market value of your home minus the value of the land.
Select a deductible that you can afford without involving the insurance company. (Check with your lender because most lenders want a $500 deductible rather than a higher amount.)
Seriously consider an umbrella liability policy. Generally the coverage is less expensive than increasing liability limits in a standard policy.
Know your policy!!!!
posted by shirley harry at 8:27 AM
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