Homeowners Insurance

Homeowners insurance gives homeowners financial protection against disasters. It will cover damage to your property and the contents of your home. It will also cover your liability or legal responsibility if there are any injuries or property damage caused by you or a member of your family. Almost all mortgage companies and loan offices require proof of homeowners insurance before the purchase of a home is finalized. There is some important information to understand when you are looking for homeowners insurance.

Types of Home Insurance Policies

A Limited Coverage Policy (O-1) is considered the bare minimum coverage. In fact, it is no longer an option in some states. It covers 10 major disasters. They include those disasters caused by naturally occurring events such as lightning, dangerous weather, or the eruption of a volcano. They also include those disasters caused by others including fire and smoke, vandalism, a crashing airplane, a crashing vehicle, civil uprising (such as a riot), or theft.

Basic Policy Coverage (HO-2) gives more protection than a limited coverage policy. In the states that no longer accept limited coverage policies, a basic coverage policy is the bare essential coverage. In covers the 10 major disasters listed above as well as:

• Damage due to falling objects
• Flooding from an indoor appliance, heating or cooling system, or plumbing
• Cracking or burning from an indoor appliance, heating or cooling system or plumbing
• Freezing from an indoor appliance, heating or cooling system or plumbing
• Damage from an electrical surge
• Damage due to the weight of snow or ice build up

A HO-3 Policy is the most popular and comprehensive policy. This policy covers all aspects of the home including the structure and contents. It typically covers all perils except for floods and earthquakes. This coverage includes liability protection as well.

A Renters Insurance Policy (HO-4) gives the renter added coverage. Most complexes have some type of coverage but the coverage may not include some of the content protection you need. Some renters’ policies can also give you liability coverage for any injuries or accidents that may happen on your rented property and further protect the contents.

A HO-5 Policy offers the same coverage as most HO-3 polices but includes a few extras. These extras include damage that may be caused by passers-by and visitors as well as family members.

A HO-6 Policy covers condos or co-ops. Though most structural damage and perils will be covered under an association insurance that is paid through a co-op or condo association, you may want additional coverage. A HO-6 policy covers your personal property and gives you some liability coverage as well should someone get injury while on your property.

A HO-8 is known as an Older Homes Policy. This policy has the same coverage as an HO-2 but only pays for the repairs instead of replacement. This is due to the high cost of replacement parts in an older home.

Additional Homeowners Insurance Coverage Options

Flood and earthquake coverage will usually come in two different policies. The deductible for both coverages is typically high but the premiums are low. If you live in an area prone to either of these natural occurrences, you will want to have coverage.

Earthquake coverage is only for damage caused directly by the earthquake such as the shaking of a structure. It will not cover, for example, damage from a wave that was produced by an earthquake.

According to FEMA, there are more floods than any other natural disaster. Having coverage is important. When you purchase flood insurance it is regulated through The National Flood Insurance Program which is a part of FEMA. The National Flood Insurance Program allows a homeowner to insure a home for up to $250,000 for the building and $100,000 for the contents.

Valuables Protection

Though the content of your home is covered in most basic policies there are limits placed on your valuables when it comes to replacing them. If you have many costly items, antiques, or collectibles in your home, you may want to add additional valuables protection coverage. This additional coverage can cover jewelry if is it is stolen or even misplaced or if a stone falls out of a ring of necklace.

Identity Fraud Protection

In the event that someone breaks into your home and steals items that could give them the means to steal your identity, you will be given added protection through an identity fraud protection policy. In most cases this coverage will include a specialist who can help you deal with agencies, law enforcement, etc. that may be part of getting your identity back. Also provided will be a certain dollar amount of coverage for court or attorney fees that may be involved in clearing your name.

Additional Living Expenses Coverage

If your home is damaged and your homeowners policy is covering the repairs, you home may still be uninhabitable until the repairs are finished. This means that you may have to rent a home to stay in a hotel. Additional Living Expenses Coverage will provide you with the money to pay for these additional expenses that may come up while you home is being repaired.

Electronics Coverage

This coverage gives you additional coverage for electronics or computer equipment. If the value of your electronics or computer equipment in more than the limits of your basic coverage, you may want to consider this additional coverage. This is especially needed if you have several computers and/or other electronic devices.

Higher Limits

You can go with one of the typical HO coverages, but ask for an increase in the limits of liability for property damage or bodily injury. This will increase your monthly premium, but give you more coverage when needed. Deciding what limits to increase will depend on what type of home you have and what the contents of your home are. The more valuables you have, the more coverage you will need.

You need to assess the value of your home, the contents of your home, and the type of natural disasters or perils that may be more common in your area. After assessing these things you can decide what coverage is best for you and your home. Speak to a qualified homeowners insurance agent to ask any questions you may still need to have answered. Make sure you have the coverage you need. It will give you peace of mind.

Comparing Free Homeowners Insurance Quotes Online

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