Home Insurance - Insurance Tips Today

Basic home insurance policies offer personal insurance protections, including losses which occur to the insured policy holder's home or belongings, loss of the use of their home, i.e. additional living expenses, as well as liability insurance for any accidents which occur on the insured property.

Basic Home Insurance policies

Basic plans for home insurance are the most popular and the majority of people purchase basic home insurance polices as they considered to be the cheapest.

Basic plans cover the most common types of disasters such as:

√ Fire                                                                                                  

√ Lightning

√ Theft

√ Wind - Hail

√ Explosions

√ Vandalism - riots - civil unrest

√ Liability for accidents to others i.e. your visitors who may get injured when visiting your home is generally also covered to some extent in basic home owner insurance policies.

While not all accidental circumstance are covered in basic home policies. Additional coverage can be added. Disasters such as earthquake, Flooding, Sewer backups are not part of standard policies and need to be added depending on your personal needs.

Flood Insurance

Flood disasters are most common natural disaster besides fire. Flooding for insurance purposes is slightly different than when
a burst water pipe floods your home.

Flooding for insurance purposes is usually when two adjacent properties are under water.

To cover items such as water damage from busted pipes you do not need flood insurance. Flood insurance would depend on the area you live in and the risk your home may have against flooding.

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Earthquake Insurance

Traditional home insurance policies do not provide protection against damages caused by earthquakes.

Surprisingly, only a small percentage of people even in advanced countries like the United States of America purchase earthquake insurance.

Even in places like California where earthquake fears are always present, only 12% of homeowners had earthquake insurance protection in 2005.

If your home is located in an earthquake prone area then adding earthquake insurance makes sense.

Earthquake Insurance Buying Tips

1. Check if the policy covers only the dwelling. Some policies do not cover additional structures such as garages etc. You should check the policy fine print. Sometimes a garage may be covered only if it is attached to the property. If it is self standing then it may not be covered.

2. Will your policy pay for additional living expenses if you cannot live in your
    damaged home while it is being repaired.

3. What deductible do you have to pay before insurance money is given. The
    higher your deductible the lesser your premium. So check out various
    deductible options.

4. The most important thing to remember is to check out and understand if
    there are any exclusions or limitations mentioned in your policy. Check this
    when you buy your policy rather than find out when you have an insurance
    claim.

Home Insurance Buying Checklist

√ Make sure your policy provides for replacement costs.

If you do not have replacement costs, when paying a claim, your insurance company will deduct depreciation for items you claim compensation for.

To give you an example,
if your television is stolen. Your insurance company
will check the amount you initially paid for the Television and deduct a certain amount for the deprecation of the television.

The depreciation would be based on the time you had
the television. Your insurance company is such a case would pay you the reduced amount

On the other hand, if you had replacement value coverage, the insurance company would have to pay out the current price for your television even if the price was considerably higher than what you originally paid. There would  be no deduction for depreciation regardless of how may years you had used the television.

√ Make sure your insurance policy has some type of inflation guard.

   This way the value of your home will always be adjusted to account for rising
   construction and material prices.

   If you have  made any improvements to your home, be sure to notify your
   insurance company. Whenever you add value to your home, you should
   have  your insurance to reflect that added value. The costs associated with
   adding such additional amounts is very low and well worth the money.

√ Make sure your policy provides for additional living expenses.

   This comes into play when you need to live away from your home when it is 
   undergoing repair. Expenses such as hotel rooms etc can add up. Check if
   such expenses are covered and up to what amount.

√ Make sure you have sewage backup coverage.

   Backups of sewage through your drain pipes can prove to be quite costly.
   The mess and disgusting odors are quite sickening. Not having sewage
   backup insurance coverage really be very frustrating.

   Trust me, make sure you have this coverage added to your policy. MOST
   home insurance policies do not cover sewage backup. Many agents do not
   even bother telling you about the availability of sewage backup coverage.

   You must add sewage backup coverage to your policy for a small additional
   cost. The cost is usually only about three to four dollars a month.

√ Make sure you have sufficient liability coverage.

   Upgrading liability coverage from say one million dollars to two million 
   dollars cost only a few pennies a day. Check the additional cost. If you can
   go for the extra million for an added premium of about $20 more per year
   then its well worth

√ Make sure you are protected for added costs in case of new building
   codes.

   Construction codes are periodically change by municipalities to ensure safety
   and environmental rules are followed. This may result in extra building costs.

   It makes sense to ensure that your policy will pay the added costs incase
   your home has to be rebuilt and you are faced with additional costs due to
   new building codes.

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