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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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