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Homeowners Insurance

Understanding the Ins and Outs of a Homeowners Insurance

Homeowners insurance provides protection in case your home or its constituents gets damaged. It also offers protection if you or your family member are held legally liable for injuries to others or destruction to their property. Most mortgage lenders also demand this insurance. Most insurance policies that protect your home include some basic policy coverage, but there are also many types of optional coverages that you can choose to protect the things that you consider important to you.

What’s covered and what’s not

Most home insurance policies will cater for damages caused by perils such as windstorms, lightning, fire, hail, vandalism, or theft. There are, however, other homeowner’s policies that cater to additional dangers too. Typically, earthquakes and floods are excluded.

Types of Home Insurance Coverage

Liability Coverage- it protects you if you are sued, or a claim is made against you for damages after someone gets injured on your property.

Personal Property Coverage– helps protect possessions inside your home, including furniture, stereos, bicycles, and much more. If the belongings are damaged or stolen outside of your home, this type of insurance could also help to refund them.

Dwelling [home structure] – protects your home’s physical structure, like the roof and walls.

Other Structures- offers protection to other physical structures on your premises that are different from your home. These structures can be things like a stand-alone garage or a shed.

Guest medical protection– covers the cost of medical bills for an individual who is injured while on your property.

Though not mandatory, you can also purchase an optional coverage such as the reimbursed living expenses insurance which covers increased living costs such as hotel stays and food in case your home becomes inhabitable following a covered loss.

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Additional Coverage Options

Flood Insurance

The National Flood Insurance Program (NFIP), designed to help those who live in flood zones, is operated by The Federal Emergency Management Agency (FEMA). There are quite a few insurance providers who also provide additional coverage to help fill the gaps left behind by this standard protection. It’s important to know the details of this kind of policy coverage so as to clear up any misconceptions about how it can help those living in flood-prone areas.

Even carrying good homeowner’s insurance coverage that has a component for hurricanes will not necessarily cover for damages stemming from rising waters. Rising water could happen due to overflowing bodies of water, a tidal surge, or other kinds of water flow.

A major proportion of natural disasters that occur in this country generally will have a component of some flooding. A whopping 80% or so of these kinds of insurance claims are filed in high-risk flood zones. More often than not, FEMA provides support in when a presidential declaration of a national disaster has been released. Therefore, it’s highly advised to consider purchasing good flood coverage that will protect you from damages even when no national disaster has been declared by the government.

It is important to note that one cannot obtain coverage for flood events using a standard homeowner’s or renter’s insurance plan (unless obtained through the federal government).

This kind of policy is offered through the NFIP to those jurisdictions that participate in the program. However, one can purchase a policy from an insurance provider to protect one’s self against a myriad of flood-related losses. One needs only to conduct an Internet search for an agent or provider that offers NFIP insurance policies. There is flexibility in that a property can be covered on a cash value basis or in the form of a replacement basis.

NFIP insurance coverage is surprisingly affordable with annual starting premiums of around $115. FEMA states that protection can be increased up to a maximum of $250,000- This amount is determined by the insured’s individual coverage needs and by the flood risk in the locale in which the policyholder resides. Additionally, one’s assets that lie within the home can be covered up to $100,000 annually.

Note that there is generally a month’s waiting period before policy protections can be utilized, so it is smart to purchase coverage while everything is hunky-dory. And one is also wise to look into obtaining a level of insurance protection that will cover your flood damages beyond the standard limits of an NFIP insurance policy. In other words, don’t wait until you’re knee-deep in water in your living room before acting and don’t necessarily count on the rather basic coverage that is provided by the federal government to fully cover your losses. This is where private flood insurance can step in and help enormously in times of watery crisis.

Hurricane Coverage

Good hurricane insurance coverage is available to protect homeowners from the myriad of expenses that they can face if they are victims of loss due to the effects of a hurricane. This coverage can protect homes and other permanent (or even mobile structures) from these events. Keep in mind that a claim may only be filed once a hurricane has been officially recognized by an official weather agency.

Hurricane insurance is designed to provide financial security for those who own homes in areas that are at high risk for both hurricanes and less intense tropical storms. Various types of residential properties can be covered including single-family homes, multi-family homes, apartment buildings, condos and more. In order to carry such insurance (and to make a claim), an individual must provide proof of ownership of the property. The typical homeowner’s insurance policy will normally cover damage from wind and wind-whipped rain. So, if high winds were to tear off the shingles from your home and water was to penetrate through the roof, the resulting damage would be covered. However, many insurers exclude losses from hurricanes, so it is vital that one read any policy details to see where any potential limitations on water and wind damage may lie.
Homeowners in regions that are at hurricane risk are sometimes mandated to obtain hurricane insurance coverage. At any rate, purchasing separate flood and windstorm policy coverage can be smart for just about anyone.

Insurance providers who provide such coverage will often utilize in-depth studies of weather patterns in specific regions that are to be covered. Homes that reside along certain coastal areas of the U.S. are known to be at higher risk for hurricanes. If an extreme weather event occurs, policyholders may then file a claim for any property damage and other incurred expenses. Remember that the insurance company will need to confirm the hurricane event by verifying it with weather monitors. The Saffir-Simpson Hurricane Scale is what often is used to determine the intensity of the hurricane and the likely damage that will result in insured homes.

Insurance for hurricanes pays out for the repair or rebuilding of homes, garages, sheds, pool houses, gazebos, and other similar structures affected by these storms. The interior of a damaged building can be refurbished with this insurance compensation. In the aftermath of a hurricane, driveways and landscaping will often need repairs as well and with this insurance coverage, one can access the funds necessary for a full-scale reworking of one’s damaged property.
Even carrying good homeowner’s insurance coverage that has a component for hurricanes will not necessarily cover for damages stemming from rising waters. Rising water could happen due to overflowing bodies of water, a tidal surge, or other kinds of water flow.

Earthquake Insurance

Earthquake insurance is a highly specialized policy that homeowners can purchase to protect themselves from losses resulting from property damage or loss due to seismic activity. Ascertain regions are more likely to experience earthquake activity than others, coverage is sometimes not offered in certain areas. The cost of this coverage is determined directly due to the probability that a quake will cause major damage to your home. This type of insurance is different from a typical policy that covers personal belongings and real estate property.

Earthquake insurance provides compensation to help cover the cost of repair or replacement of covered structures and items damaged or destroyed in an earthquake. It will not cover losses associated with other events, like fire, floods, or wind storms. This type of insurance will normally have a large deductible that varies depending on the coverage level purchased and, critically, the location of the covered property.

Those who reside in a quake-prone region such as California can carry this insurance from a myriad of insurance providers. The typical policy will cover structural damage as well as any damage or destruction of covered personal property. Usually, the personal property payout for losses is set at a specific dollar amount rather than comprehensive coverage for all possessions. This is due to the fact that personal items like furniture for example will often make it through a quake intact as opposed to a fire or flood in which pretty much everything will likely be damaged. This helps keep costs down for both the policyholder and the provider. A big-screen TV is far more likely to sustain damage in a quake, so insurance providers will often appraise the values of replacing these fragile personal item s and then set a fixed dollar amount of coverage for that component of the policy.

Earthquake insurance is usually determined based on a property’s actual value. For example, a $500,000 home can be insured for the full amount, especially if it is located in a higher-risk area. In this case, though, the deductible will be a pre-determined percentage of the total coverage, usually about 15 percent. The usual exclusions will include valuable jewelry, any improvements done to landscaping, swimming pools, and other structures that are on the property like a shed or a detached garage. There are exceptions, but normally these will not be a part of a standard earthquake policy.

There are two types of earthquake insurance available. The first is “single-limit,” which can cover the entire appraised value of the primary structure. Another kind is a standard policy that offers similar coverage to that which the homeowner already has, with the exception being that now the homeowner is protected from earthquakes whereas previously he or she would not have been. It’s important to remember when considering this coverage how big a difference it can be between paying a 15 percent deductible and having to pay out-of-pocket for the total loss of property if one has no coverage at all.

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