Introduction to Home Owner Insurance
Introduction - the purpose of the web site is to provide basic information about the different types of Homeowner Insurance. Insurance is a risk transfer mechanism, someone (the policyholder) pays someone else (the insurance company) to pay out in the event of a loss. Homeowners insurance is a package policy. that covers a wide range of insurance perils, some of which we list on this site.
Main
Policy Sections - the main elements are as
follows:
- Part
A - House. This section could accurately be
described as the most important part of your
insurance policy. This section will tell you how you house is covered (
or isn't covered). You should insure for the rebuilding cost of your home not
it's market value. Your insurance cover will depend on your type of policy.
- Part
B - Additional Structures- This section of
you policy covers you for additional
structures that are not attached to your main building, these would include the
garage or shed for example. A limit of cover of 10% of your total homeowner
insurance cover is normal.
- Part
C- Personal Property - This cover will give
you insurance quote for your Personal
property and possessions such as furniture, electrical goods and clothing.
- Part
D - Loss of Use - if you property becomes
uninhabitable by an insured peril, this section of your homeowner insurance
policy will pay for your living expenses away from the home whilst your home is
being repaired or rebuilt.
- Part
E - Personal Liability- This policy section protects you from liability
claims should someone become injured on your property. If a lawsuit is issued
against, you the policy will also pay defense costs
- Part
F Medical Expenses- This section helps to pay medical bills of people
injured on your property through your own activities.
Levels
of Home Owner Insurance Protection - there are
three main levels of protection afforded by a Home owner insurance policy
quote:
- Actual
Cash Value - Your home or property is covered for
the depreciated amount of the replacement value at the time of loss. The value
of your home will depreciate over time.
- Extended
Replacement - Your house or property is
covered up to a specified amount . For example, your home may be covered by
your homeowner policy for $200,000 with a $250,000 policy cap. If the event of
a loss and it was determined that the
home needed to be rebuilt, then your extended home owner cover replacement cover might pay up to $250,000 of rebuilding
costs.
- Guaranteed
Replacement - This is the best type of insurance policy, it does cost more money
but offers the best cover. There is no cap on the sum insured and you will be
guaranteed replacement following a loss. You may have paid a lower amount for
your property but over the years have carried out many improvements to increase
it's value. This policy will help you retain the true value of your home.
Levels of Home Owner Insurance
- HO1 or Basic Home owner Insurance - covers damage to your home resulting from a limited number of perils, such as fire, theft and vandalism.
- HO2 or Broad home owner Insurance - covers same types of peril as HO-1, plus some additional natural causes. It is only slightly more expensive than HO-1, but will provide you with damage resulting from ice, snow and falling objects.
- HO3 or Standard Home owner Insurance - is the most common type of homeowner's policy, It covers damage resulting from most natural disasters, however floods and earthquakes are not covered and you will need a separate policy if you want these perils insured Those are covered by separate policies.
- Fair Play Policy - You may not qualify for a one of the above homeowner policies but you may qualify under the FAIR plan ( Fair Access to Insurance) This is normally for properties in areas of high crime or run down area.
Insurance
for Condominiums - if you are the owner of a condominium owners share the costs of public
grounds with other members of their condo association, there is a special type
of homeowner's insurance that covers condominiums, this is called HO-6. This
policy covers the areas owned by the individual condo owner. Coverage for the
shared property is purchased separately by the condominium association.
Pets - in most states it is legal for insurance companies to charge homeowners higher premiums or refuse to renew a home owner policy based solely on the owner's breed of dog? Some owners are being told give up your dog or have your insurance policy cancelled. According to the centre for Disease Control & prevention, here are the top ten pure breeds responsible for most dog fatalities ( in descending order):
- Pit bull-type
- Rottweiler
- German Shepherd
- Husky-type
- Malamute
- Doberman
- Pinscher
- Chow Chow
- Great Dane
- Saint Bernard
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