Your Guide to Home Insurance – Choose Wisely
May 23rd, 2010 | 
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Homeowners insurance is one of those things that is not required but is necessary. A standard policy provides you protection against many disasters to your home mortgage with an exception a few. The insurance also gives you liability protection, in case of any injuries and real estate property damage caused by you or your family members to other people. Luckily, the policy covers damage caused by your household pets. Certain damage and special cases require supplemental homeowners insurance coverage:
Earthquake insurance:
Covers damage due to earthquakes
Available from private insurance companies rather than from the federal government
Protects home structure and personal possessions from the earthquake cracking and shaking
Your standard homeowner policy covers damage from fire and water damage due to burst gas and water pipes
Flood insurance:
Covers all damage caused by flood
Rather inexpensive coverage
Reimbursement for flood damages not contingent upon being declared a Federal disaster area
Unlike other Federal disaster relief packages, your covered losses are fully paid
Available from the National Flood Insurance Program (NFIP)
NFIP flood insurance is guaranteed by the Federal government
Insurance can be obtained through local insurance representatives
You can call the NFIP AT 1-800-427-4661, for more information
Endorsements:
Provides extra coverage for certain items at an extra premium
Endorsements increase or enlarge coverage on these items
Endorsements can be used to enhance protection for items such as stamp or coin collections, art, computer and camera equipment, jewelry, television and radio satellite antennas and dishes, furs, etc.
Umbrella:
Provides enhanced liability protection
Homeowner policies provide property and liability coverage and resulting loss from damage. Here are some basic types of home insurance policies:
HO-1:
Your basic homeowners policy
Provides your home protection against 11 different perils
HO-2:
More expansive homeowners policy
Provides your home protection against 17 different perils
Your premiums are about 5 percent to 10 percent higher than a HO-1 policy
HO-3:
Particular homeowners policy
Provides your home protection against all perils except perils excluded by your policy
Your premiums are about 10 percent to 15 percent higher than a HO-1 policy
HO-4:
Covers renters, renters policy
Provides your home protection against 17 different perils, includes liability
Does not insure the home itself
HO-5:
Comprehensive homeowners policy
Excludes damage from earthquake, floods, and wars
HO-6:
Coverage for co-ops or condominiums
Covers personal property, liability, and certain unit improvements
Unit structure usually covered under the association’s insurance
HO-8:
Homeowners policy for older houses
Provides your home protection against 11 different perils which include repair costs or actual cash value not replacement costs
Better suited for older homes whose market value is less than rebuilding costs
A homeowner policy categorizes perils into: named perils and open perils. Perils express covered causes of loss.
Named Perils:Lightening, Aircraft, Fire, Theft, Hail, Smoke, Vehicles, etc
Open Perils: Accidental overflow of water, Falling objects, Weight of ice/snow/sleet, Burning, Bulging, Sudden cracking, Freezing, etc
When beginning the homeowners insurance application process, be prepared to provide extensive information to the insurance company. The insurance company will do a thorough evaluation of your personal credit, criminal, insurance, and employment history; as wells, confirm your current occupational and marital status, among other things. It is important to have your information at hand when discussing options with an insurance company to make the process of getting a homeowner insurance policy fast and easy.
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