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:: HOME :: CREDIT CARDS :: LONG DISTANCE :: INTERNET SERVICE :: LOANS :: CELL PHONES :: INSURANCE · Main Page · Auto Insurance  Compare Quotes Search by State Tips and Advice· Health Insurance Compare Quotes Tips and Advice· Life Insurance Compare Quotes Tips and Advice Life Ins. Calculator· Home Insurance Compare Quotes Tips and Advice· Business Insurance Compare Quotes Tips and Advice· Other Insurance · Info & Resources :: ONLINE BANKING :: KNOWLEDGE :: MORE |
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Home Insurance Tips and Advice Center Topic: Home Insurance Terminology See the subtopics menu for definition of and explanations about common homeowners insurance terms. For additional information about home insurance, see the topic list directly below.
 Homeowners InventoryWhat is a homeowners inventory and is it necessary? A homeowner's inventory is an important piece of the homeowners insurance process. If a home and possessions are destroyed, a list of the contents will help with the insurance claim against the homeowner's policy, as well as verifying the loss for income tax returns. It also can help a homeowner determine the proper amount of coverage to purchase in the first place. The first step is to make a list of possessions, describing them, when and where purchased, and make and model numbers if applicable. Include copies of receipts, contracts, or appraisals. For items like clothing, it is only necessary to list the amount of each category owned pants, shirts, dresses with notes, receipts, or appraisals for anything particularly valuable. The inventory process can take a bit of time, so at the very least, homeowners should take an inventory of all expensive or major items in the home like art, jewelry, or collectibles. Photographs or videotapes are a way to show many items at once. No matter how the information is recorded, it's important that the information be stored outside the homeat a friend's house, in a safe deposit box, or, for computerized records, backed-up off-site. This way, if the home is damaged, the information will be safe, and available to share with the insurance company. ^ Back to top Homeowners Liability InsuranceWhat is homeowners liability insurance? Liability insurance is a standard type of homeowners insurance, and it is designed to protect homeowners against lawsuits that can result from injuries or property damage caused to others by the homeowners, their pets or children. Liability insurance coverage pays for the cost of defending a homeowner in court and any awards paid to the other party. Liability coverage has an off-premises component, meaning that it follows homeowners, and their children and pets, anywhere in the world, and will pay for losses anywhere in the world, not just in the home insured. The liability portion of a homeowners policy also covers medical expenses if someone is injured in the home, which is a way to avoid having a liability lawsuit filed against the homeowner. To feel more comfortable with the amount of liability coverage, some homeowners increase the liability limits on the standard homeowners insurance policy. Others decide to purchase umbrella or excess liability insurance. This type of insurance includes additional coverage for things like libel, slander, or invasion of privacy claims brought against the homeowner. Umbrella coverage may be worthwhile for homeowners with additional property or savings or other investments that are worth more than the limits of the standard homeowners liability insurance coverage. ^ Back to top Homeowners Property InsuranceWhat is homeowners property insurance? Property insurance is a standard type of homeowners insurance, and it is designed to protect the physical possessions of the homeowner, as well as the structure of home itself. Homeowners property insurance will pay to repair or rebuild a home if it's damaged by a disaster covered in the policy, such as hail, wind damage, or damage caused by a vehicle. It does not cover, however, damage caused normal wear and tear on the property. Personal property coverage also protects a homeowner's possessions and personal belongings. The insurance will pay to replace items lost or damaged as a result of a disaster like a fire or damage caused by an aircraft, or items lost because of theft. Homeowners property insurance includes off-premises coverage, meaning that it follows the homeowners' possessions anywhere in the world, and will pay for items lost anywhere, not just in the home insured. Expensive items, such as fine art or furs may require additional insurance to cover their full value. If a homeowner purchases a rider to the standard insurance policy, these items will be covered, whether they are damaged, lost in a disaster, stolen, or accidentally left somewhere and not recovered. Damages to a structure and property are not covered if they're caused by events not included in the insurance policy. A typical homeowner's policy doesn't cover damages caused by earthquakes, floods, war, or nuclear accidents. ^ Back to top Umbrella PolicyWhat is an umbrella policy? Umbrella liability coverage is a type of additional homeowners liability insurance. This type of insurance provides an extra layer of protection for homeowners, above the liability limits of the standard homeowners insurance liability coverage. Umbrella policies can be purchased for homeowners, renters, condominium or co-op, or automobile insurance policies. Like standard liability insurance umbrella policies protect homeowners against lawsuits from injuries or property damage caused to others by the homeowners, their pets or children, anywhere in the world. Umbrella liability insurance also includes additional coverage for things like libel, slander, or invasion of privacy claims brought against the homeowner. Umbrella coverage may be worthwhile for homeowners with additional property or savings or other investments that are worth more than the limits of the standard homeowners liability insurance coverage. Umbrella policies only pay after the standard homeowners insurance policy has paid. The cost of this type of insurance is not prohibitive, but most insurers require that the underlying homeowners liability policy be at least $300,000. Home insurance quotes for umbrella policies start at about $1 million in coverage for anywhere from $150 to $350, and can go up from there. Additional coverage may cost $75 to $100 for each million above that. ^ Back to top Insurance for Condo or Co-op OwnersWhat is condominium or co-op insurance? Condominium or co-op insurance provides homeowners with financial protection against the loss of the part of the structure owned and personal possessions, and lawsuits against the homeowner. Like a standard homeowners policy, condominium owners that have mortgages on their property are required to have personal insurance, and in addition must have proof of a master policy that covers everyone in the association for liability and physical damage in the common areas of the property. Dwelling coverage for condominiums and co-ops is the same four types of insurance coverage for homeowners who own the entire structure:
^ Back to top Replacement CostsWhat are replacement costs? Homeowners and renters have three choices of what type of homeowners policy is needed to replace the structure of the home and the items in it. An actual cash value policy replaces the items at their current cost the price originally paid minus any depreciation of the item over time. For example, if a homeowner lost a five-year old stereo, the insurance would determine how much that equipment would be worth today after five years of use so a homeowner would get only a percentage of what was originally paid, and probably not enough to purchase a new stereo. This is the least expensive type of policy. Replacement cost policies pay the actual cost of replacing or repairing the item or home at today's prices. A guaranteed replacement cost policy is the most expensive option, and may not be available for all homes. This type of policy will pay to replace a home to the condition it was prior to the disaster, even if it exceeds policy limits. It does not cover the cost to bring a building up to the current building codes, however. An ordinance policy is the only policy that will pay for any additional costs associated with brining a replacement home up to current building codes. When considering homeowners insurance coverage options, it's important to get enough insurance to replace the structure of the home at current construction costs. This price isn't necessarily related to how much the home would sell for, so it requires some calculation. Although a lot goes into this calculation, it is roughly the square footage of the home multiplied by the costs to build per square foot in the area. ^ Back to top High Risk Homeowners CoverageCan insurance be obtained for homes in high risk areas? When it comes to homes that are located in high-risk areas, it may be difficult for homeowners to receive a homeowners policy. Homes are considered "high risk" for a variety of reasons. One common example of a high-risk home is one with older systems, such as plumbing, electrical, or heating, that haven't been updated in many years and could potentially cause problems. Another reason why many homes are considered high risk is their location: because they are subject to severe weather like hurricanes or tornadoes, or if they are in a high-crime area. If insurance companies turn down coverage for a home, homeowners can still get a home insurance quote. If the issue is the condition of the home, homeowners should talk to an insurance professional who already insures a car or former home, for advice. If the issue is the location of the home, homeowners should talk to neighbors to find out who insures their homes. In either case, a call to the state insurance department can also help identify insurers who work in the area. If no one will insure the property, some states have shared market insurance plans. Fair Access to Insurance Requirements (FAIR) plans are usually more expensive than equivalent coverage in another area, but may be the only option for some homeowners. Beach and Windstorm plans are like FAIR plans for residents of seven states the border the Atlantic and the Gulf of Mexico. ^ Back to top
Should you refinance your existing mortgage? This calculator can help you that find out. Enter the specifics about your current mortgage, along with your current appraised value, new loan term, new rate and closing costs. Together, this can determine how much refinancing might save you overall. · Calculate how much you could save in interest
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