Two aspect of home insurance - Property coverage & Liability and Medical Payments.
Property coverage:
1. Coverage A: House and Grounds - your coverage must be at least 80% of the replacement cost to get the full benefit of the policy. You wnat 100% guaranteed replacement coverage, 100% of the replacemnet cost.
2. Coverage B: Other structures - Amounting to 10% of coverage A. This insures you unattached garage, tool shed or other outbuilding on your property.
3. Coverage C: Contents - this covers everything inside your home excepting whateve may be specifically exlcuded; typically gold, silver, jewelry, which require separate rider.
4. Coverage D: Loss of use - this coverage allows you living expenses during the time required to repair of rebuild you house. The amount is 20% of coverage A.
Specific homeowner policies take the following forms.
HO1- the basic policy - covers the following risks:
. fire of lightning
. windstorm or hail
. explosion
. riot or civil disturbance
. damage from an aircraft
. damage from a vehicle
. smoke damage
. vandalism or malicious mischief
. theft
. breakage of glass that is part of a building
. volcanic eruption
Ho2 - broad coverage -covers all risks specified under HO1 and:
. burglary
. falling objects
. weight of ice, snow or sleet
. freezing of plumbing, heating or AC system or a house hold appliance
. accidental discharge or overflow of water of steam from a plumbing, heating or AC system
. sudden and accidental discharge from an artificialy generated electrice current
. sudden and accidental tearing apart, cracking, burning, or bulging of a heating, AC or protective sprinkle system
HO3 - special homeowner's coverage - covers all perils except those explicitly excluded from the contract, usually:
. flood
.earthquake
. war
. nuclear accident
Ho5 - provided even boarder coverage than HO3. extends all risk coverage to your contents, as well as your home, unattached property and loss of use.
HO4 and HO6 - provide coveragef for renters and condo owners.
HO8 - equivalent to HO1 but for older homes.
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Personal Liability: Two categories - Coverage E (Personal liability) & Coverage F (Medical Payment to others)
Coverage E: covers certain risks whether you are at home or away from home. The typical coverage is $100,000 per occurance for your liability for bodily injury or property damage, however, the recommended amount is at least $300,000.
Coverage F: pays up to $1,000 per person for medical bills if someone is injured on your property. Recommend to increase the coverage to $5,000.
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Keeping your policy current:
Once you have selected the appropirate policy, you shouldn't neglect to keep it current. Changes that may require more extensive coverage include remodelling a kitchen or other rooms, building an addition and acquiring valuable possessions (artwork, antiques, computers, etc.)
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Umbrella Liability Insurance:
Umbrella policies are essentially extened personal liability coverage. For instance, if someone suffers an accident on your property, your liablity coverage stops at $500,000, but the accident victim sues you for negligence and demands 1 million in damages. Under these circumstnaces, an umbrella policy will protect you for whatever amount you've chosen. Typical face amouns range from $1 to $5 million. Policies of this sort include coverage fo your home, automobiles and other vehicles (boats, snowmobiles, etc.) and other property.
