Unit 6.3 Part 3 Homeowners
Insurance
Dollars & Sense
Your home is likely to be the biggest
investment you will ever make. Losing this asset would cause a financial disaster if you don’t protect it with insurance.
WHY DO I NEED HOMEOWNERS INSURANCE?
The Components of Basic Homeowners
Insurance
Dwelling – Coverage that protects the
structure of the home (roof, walls, wall-to-wall carpeting, etc.).
Other structures – Coverage for sheds, detached garages and other structures not connected to the main dwelling itself.
What does basic homeowners insurance cover?
• Personal Property – Coverage for personal
items (clothing, furniture, appliances, computers, etc.). Provides coverage on and off the premises.
• Loss of Use – Coverage for when an insured has to move out of the home while repairs are made as a result of damage caused by a covered loss.
What does basic homeowners insurance cover? cont
Liability Insurance – Pays for damages the
insured is legally obligated to pay due to bodily injury or property damage.
Medical Payments – Pays for medical and/or funeral expenses incurred by a person on or off the insured’s property.
What does basic homeowners insurance
cover? cont.
Most homeowners insurance contracts normally include
coverage for the following items, but this can vary by company and state. Check your policy to be sure what is and what is not covered.
Trees, shrubs, plants and lawns – Coverage is provided to these items if damaged by a covered loss.
Debris removal – Coverage for removing the remains or rubbish of any property destroyed as a result of a covered loss.
Fire Department Charges – Provides coverage for customary fire department charges under contract or agreement. May be subject to limits depending on your policy.
What does basic homeowners insurance
cover? cont.
Perils Covered by Homeowners
Insurance Fire and lightning Windstorm and hail Explosion Riot and civil
commotion Impact from aircraft Impact from vehicles Smoke Vandalism and
malicious mischief
Theft Falling objects Weight of ice and snow Glass breakage Accidental overflow of
water from plumbing Accidental electrical
damage to appliances (caused by power surge)
Flood Hurricane or windstorm Earthquake Acts of terrorism or war
Perils NOT Covered by Standard Homeowners Insurance
(You may need purchase a separate policy!!)
ADDITIONAL COVERAGES*
• Jewelry, watches, furs• Guns• Tools• Cameras, camcorders• Silver, gold, pewter
* Coverage for these items is already included in the homeowners insurance policy up to certain limits. For an additional premium, you can increase the
limits of these coverages to meet your needs.
• Money, coins, securities, deeds
• Watercraft, trailers, equipment, motors
• Computers• Business property
Protects your family and anyone under age 21
in your care Protects you against legal claims you are
legally obligated to pay for causing bodily injury, sickness, disease or death of others
Pays the cost of defending a claim against your
Covers damage to the property of others
LIABILITY COVERAGE
Covers first aid expenses of others
Provides for accidental death benefits
GUEST MEDICAL PAYMENTS
Protecting Your Personal Property:
Two Options for Homeowners
Insurance
Definition: The value of the property lost or
damaged at the time of the loss. This method of valuation takes into consideration depreciation based on such factors as:
Age of the item Market value Condition of the property at the time of loss or
damage.
# 1: Actual Cash Value
Definition: The cost of replacing damaged or
destroyed property without deduction for depreciation in the value of the property.
#2: Replacement Cost
1) Take an inventory
2) Compare quotes
3) Select your
coverage
4) Ask about disaster coverage in your area
5) Check for discounts
6) Select a provider and
apply
STEPS TO PROTECTING YOUR PROPERTY