Sunday, September 4, 2011

Homeowner’s Insurance

Homeowner’s Insurance, also commonly called hazard insurance or homeowner's insurance (often abbreviated in the real estate industry as HOI), is the type of property,

Homeowner’s Insurance
 Homeowner’s Insurance

Homeowner’s Insurance  
insurance and real-estate industry lobbyists say. Unlike wind damage, flood damage typically isn't covered under Homeowner’s Insurance
 Yes! Everyone does. In the event of a catastrophe or loss, without homeowner’s coverage, out of pocket expenses would be unbearable. And chances are, your home isn’t paid off, so you’re lending institution is going to want to protect their investment as well. Your home is full of all the things that are most precious to you – and most likely your home is your largest investment. So get the coverage you need to protect what’s most important in your life.
Do I Know What Homeowners Insurance Covers?

Homeowners insurance will compensate you for losses to your home and your possessions inside your home, so purchasing homeowners insurance is a great way to secure your investment. Homeowners insurance also covers you if legally liable for injuries sustained on your property, as well as for financial losses caused by fire, theft and natural disasters. Different companies offer different homeowner coverage, so choosing the right company and the right policy are both critical to your success. A standard homeowner policy covers the following:

    * Structures used for dwelling purposes, attached structures, outdoor personal property, and equipment used to maintain the premises.
    * Separate Structures at the same location, such as, detached garages, sheds, and other outbuildings.
    * Your personal property found inside your home, as well as the personal property of guests at your home.
    * Your legal responsibility for any injuries and property damage you or a family member cause to others.
    * Injuries to household pets while inside your home.
    * Additional living expenses in the event of a loss that leaves you temporarily unable to live in your home.

Make shopping for the right homeowner’s policy easier by taking an inventory of what’s inside your home and decide what level of coverage you would feel comfortable with. When you know the level of coverage you need, get a homeowner’s quote and choose the policy that’s right for you.
3 Types Of Homeowner Policies

When searching for homeowner coverage, HO-1, HO-2 and HO-3, are the 3 options you will be faced with. Coverage is based on the type of risk involved and the dwelling structure itself. Make sure that you understand each coverage before choosing what’s best for you.

This is your basic coverage form and is a named perils coverage that provides the most limited coverage of the three forms. Losses under this coverage are paid on an actual cash value basis. This form covers against losses such as Fire, Lightening, Windstorm or Hail, Smoke, etc.

This is your broad form and covers losses on a replacement cost basis as long as the insured maintains a minimum amount of coverage. The broad from coverage expands the cause of loss under the basic form (HO-1) and covers such losses as Burglary Damage, Freezing of Plumbing, Weight of Snow, Ice or Sleet, etc.

This is referred to as open peril insurance and protects your home against damage or loss. It covers all types of perils with the exception of flood, earthquake, and nuclear accident. Personal property is not covered under HO-1 and HO-2, but can be covered under HO-3, up to a maximum amount. This type of policy covers loss of use and pays for living expenses while your home is being rebuilt or repaired.

Before purchasing coverage, it is best to compare at least three different insurance companies, as well as seek references from family, friends or coworkers. You are insuring one of the most important financial assets you have, so find a company that wants to protect your assets as much as you do.
Terms to consider when shopping For Homeowner’s Insurance

The homeowner’s insurance terms and definitions listed below will help you understand what your agent is referring to when discussing your policy.

This is an evaluation of a homeowner’s property claim by an authorized insurance adjuster to determine property value or damaged property value.

This is a policyholder’s request to seek reimbursement from an insurance company under a homeowner’s policy for a loss to property.

This is the portion of and claim that is not covered by the insurance company, and is the amount of expenses that must be paid out of pocket before the insurance company will cover expenses. Keep in mind, the higher that your deductible is, the lower you premium will be.

This is the estimated decrease in property value over time due to wear and tear, aging, and other related factors.
Inflation Protection

This automatically adjusts your home insurance policy limits to account for increases in costs to repair or rebuild property.
Liability Coverage

This covers if someone is injured in your home or on your premises and you can be found liable for the medical expenses. The liability portion of your homeowner  policy protects you from this financial liability.
Market Value

This refers to the current value of your home if someone were to purchase it, including the price of land.

This refers to the exposure to, or cause of a possible loss such as an injury, destroyed or lost property, etc.
Personal Property

This refers to tangible property (other than land) that is temporary or may be movable in some way, such as furniture, jewelry, electronics, etc.
Replacement Cost Coverage

This pays for the cost to replace damaged property or structures before factoring in deductions for depreciation, but payment has a maximum dollar amount.
 Homeowner’s Insurance


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