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A homeowner
policy provides protection for one of your largest investments. Understanding
the various policies and coverages available will help you make an informed
decision when shopping for a policy, and identify areas where additional
protection may be needed. To get started, choose from the following:
In
general, homeowner policies offer protection in the following areas
(Hint:
Follow along with your policy to identify areas
you may want to review with your agent):
- Your Home
(Coverage A) - is for your home and any
attached structures such as a deck, breezeway, or attached
garage. Ideally the insurance amount should be equal to the rebuilding
cost. If your policy covers only the market value of your home,
garage, etc., the amount you receive from a claim may not be enough
to rebuild.
- Other Structures
(Coverage B) - refers to structures not attached
to your home such as an inground pool, unattached garage, or tool
shed. The limit for these structures is generally 10% of the total
amount of insurance on your home (Coverage A). For additional
premium this coverage may be increased to provide additional protection;
see your local independent agent for further details.
- Personal
Property (Coverage C) - is for your personal belongings
(generally referred to as your personal contents) such as
clothing, furniture and linens. A typical homeowner policy may
limit, or not include, protection for certain items such as computers,
jewelry, and antiques. Additional coverage may be purchased for
these and other items. Consult the "Special Items" drop
down on the left menu for more information.
- Loss of
Use (Coverage D) - if your home becomes uninhabitable
due to damages covered by your policy, this coverage will pay for
your additional living expenses while you are away from your
home awaiting repairs, rebuilding, or even relocating.
- Personal
Liability (Coverage E) - protects you from liability
claims that may result from someone injured on your property (other
than a member of your household). If a lawsuit should arise,
this coverage will also help to pay the legal fees associated with
your defense.
- Medical
Payments (Coverage F) - helps to pay for the medical
bills of someone who is injured on your property (other than
a member of your household).
The
amount and type of protection you have in each of these areas may vary
depending, in part, on the level of coverage you selected when you purchased
your policy.
The
Basic homeowner policy includes protection for losses caused by:
- Aircraft
- Explosion
- Fire or
Lightning
- Riot or
Civil Commotion
- Smoke Damage
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- Theft
- Vandalism
and Malicious Mischief
- Vehicles
(not owned by the insured)
- Volcanic
Eruption
- Windstorm
or Hail
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As
the name implies, a Broad homeowner policy provides more protection
than the Basic policy. In addition to the protection offered in the
Basic policy, the Broad policy includes protection for losses caused
by:
-
Damage
from falling objects.
-
Damage
to the building and its contents resulting from weight of ice, snow
or sleet.
-
Coverage
for accidental water or steam damage from plumbing, heating, air
conditioning, and automatic fire protective sprinkler systems or
a household appliance (unless residence is unoccupied, or lack
of care to maintain heat in the building has caused the claim).
-
Sudden
and accidental damage from artificially generated electrical current
(short circuits, etc.).
Whether
you have a Basic or Broad policy, it probably won't cover losses caused
by:
- Earthquake
- Flood
- Intentional
Loss
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Whether
you have a Basic or Broad homeowner policy, you might want to consider
options for additional protection.
- Replacement
Cost: There are two ways to insure your home, actual cash value
or replacement cost. If your belongings are insured for "actual
cash value" you would receive replacement cost or market
value of an item minus depreciation. (ie: If your television
was stolen and it originally cost $600 five years ago, you may only
receive a small portion of the $600 as the value of the television
has declined over the five years due to basic wear and tear.)
A "replacement cost" policy, on the other hand
would provide coverage in an amount sufficient to replace the item(s)
at current prices.
- A typical homeowner
policy limits or does not provide protection for certain items and
claims. Additional protection may be needed for computer, jewelry,
furs, antiques, flood, earthquake, etc.
- If your home
is insured for less than 80 percent of its replacement value, you
may not be fully compensated for partial damage.
- Homeowner coverages
may also be subject to a deductible as stated in the policy.
Hint: Increasing your deductible generally
reduces your insurance premium.
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