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The largest single investment most people make is in
their home. You can protect your home, possessions,
and liability with a homeowner's insurance policy. Get
a free home
insurance quote.
Homeowners insurance is one of the most popular forms
of insurance today. Of course, if you have an outstanding
mortgage on your home, chances are you had no choice
- your lender required you to secure homeowners insurance
before the loan was approved. But if the choice is up
to you, remember that homeowners insurance provides
important benefits. A few hundred dollars a year can
buy you a hundred times that in peace of mind. Get a
free home insurance quote to see the rates.
- Protecting your home,
- Protecting your personal property, and
- Providing liability coverage.
The main purpose of home owners insurance is to protect
your home (and other structures, like a shed or detached
garage). This coverage is the bread and butter of any
homeowners policy. Your house is often the most important
investment you'll ever make, and even a relatively small
amount of damage may set you back financially if you
don't have insurance.
- Lighting strikes a power line leading into your
house, causing a fire.
- A delivery truck careens off the road into your
house.
- Your hot water heater explodes.
- A tree falls through your roof during a storm.
With the typical homeowners policy, you are covered
in each of these situations. You don't have to worry
about the unpredictable. The financial problems created
by random accidents and perils will not force you out
of your home. A home insurance quote can protect you
propery.
Not only will your policy cover the cost of the damage
(exactly how much depends on your policy), but also
it will cover (up to a limit) your living expenses in
makeshift quarters while you wait for your home to be
repaired. Get a home insurance quote to compare current
rates.
In addition to protecting your home, the typical home
owner policy covers your personal property as well.
Your personal property consists of the contents inside
your home--for example, furniture, clothing, stereo,
computer equipment, jewelry, and sentimental items--as
well as outdoor items like sporting equipment and lawn
tools. So if a fire damages both your kitchen walls
and your appliances, your appliances will be covered.
An important aspect of home owner insurance is that
its coverage is not limited to property damaged on your
premises, but applies to your personal property anywhere
in the world. This is known as "off-premise protection."
If you travel now or intend to travel when you retire,
this protection can be invaluable. For example, if your
luggage is damaged by the airline during your vacation,
you typically will be covered. Or if you purchase a
wooden chest while traveling and want to ship it home,
your policy will provide coverage for this "named
peril" while the chest is in transit, even though
it has never been in your home before. Or if you're
robbed on your block, or your prized CD collection is
stolen from your car, your policy may reimburse you
(how much depends on the policy). In sum, if you value
your personal possessions, the personal property coverage
of a homeowners policy can be very important.
In addition to insuring your property, the typical
homeowners policy includes liability protection that
covers you for damage you cause inside or outside of
your home. Unlike the random perils that govern your
property (e.g., fire, explosion, theft), the trigger
for this coverage is your negligence and, unfortunately,
the "I'll see you in court" mentality. Included
here are medical payments to third parties, and your
legal costs for any lawsuits brought against you. The
importance of this coverage may not be as obvious as
that of property coverage. Nevertheless, it may protect
you against potentially troubling personal injury lawsuits.
For example: you invite your neighbor over for coffee,
and she trips and breaks her leg on a pair of shoes
you left in the middle of your front steps. Your insurance
will cover her medical bills and other costs (the ceramic
vase she was carrying) if you're held responsible. Or,
away from home, suppose you run over someone's foot
with your golf cart on the way to the clubhouse. Your
insurance will cover the injured person's medical bills
if you're found liable.
The most typical home owner insurance policy in the
United States is referred to as the "HO-3"
policy. Among other things, it provides coverage for
damage resulting from:
- Fire and lighting
- Windstorm and hail
- Explosion
- Theft, vandalism, or malicious mischief
- Damage from vehicles
- Sudden and accidental damage from smoke
- Objects falling from sky (meteorite, airplane etc.)
- Weight of ice, snow, and sleet
- Accidental discharge or overflow of water from your
plumbing
- Freezing of plumbing
- Sudden and accidental tearing, cracking, burning,
or bulging of a steam or hot water heating system
- Your personal property
- Your negligent act, whether on or off your premises
In fact, with the HO-3, every calamity is covered
except those that are specifically excluded in the policy.
The standard exclusions in the HO-3 policy are:
- Floods (this insurance must be purchased separately)
- Earthquakes (this insurance must be purchased separately)
War
- Nuclear accident
- Intentional damage
- Structures used for a business (this insurance must
be purchased separately) wear and tear on a home,
including deterioration, insect and rodent infestation,
settling, cracking, bulging, or expansion of pavement,
walls, or foundations, or damage from domestic animals
- Cars, trucks, vans, motorcycles, aircraft, and boats
with anything more than a small motor
- Theft from a house under construction
- Freezing of pipes in an unoccupied, vacant, or under-construction
house
- Vandalism and malicious mischief if the house has
been vacant for more than 30 days
- Freezing, thawing, pressure, or weight of water
or ice to a fence, pavement, patio, swimming pool,
or dock
- property belonging to tenants
- animals, birds, and fish
- losses resulting from the failure to protect property
after a loss
- Keep in mind that you can always add additional
endorsements to complement this standard coverage.
Get a home insurance quote to compare current
rates.
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