Discuss components of homeowners/renters insurance

Your personal possessions

• Most homeowners insurance policies provide coverage for your personal possessions for approximately 50 percent to 70 percent of the amount of insurance you have on the structure or “dwelling” of your home. The limits of the policy typically appear on the Declarations Page under Section I, Coverages, A. Dwelling.

Home Owner’s Insurance Coverage

Need enough insurance to cover the following: • The structure of your home.• Your personal possessions.• The cost of additional living expenses if your home is damaged and

you have to live elsewhere during repairs.• Your liability to others.

The Structure

• You need enough insurance to cover the cost of rebuilding your home at current construction costs. Don't include the cost of the land. And don't base your rebuilding costs on the price you paid for your home. The cost of rebuilding could be more or less than the price you paid or could sell it for today.

Additional living expenses after a disaster

This is a very important feature of a standard homeowners insurance policy. This pays the additional costs of temporarily living away from your home if you can't live in it due to a fire, severe storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being rebuilt

Liability to others

• This part of your policy covers you against lawsuits for bodily injury or property damage that you or family members cause to other people. It also pays for damage caused by pets. It pays for both the cost of defending you in court and for any damages a court rules you must pay. • Generally, most homeowners insurance policies provide a minimum

of $100,000 worth of liability insurance, but higher amounts are available. Increasingly, it is recommended that homeowners consider purchasing at least $300,000 to $500,000 worth of coverage of liability protection.

Renter’s Insurance

• An insurance policy which provides most of the benefits of homeowners' insurance. Renters' insurance does not include coverage for the dwelling, or structure, with the exception of small alterations that a tenant makes to the structure. This provides liability insurance.

Renter’s Insurance

• Personal property coverage. Think of everything you own. Now, try to assign a dollar amount to all of those belongings. Pretty mind-boggling, isn't it? A renters insurance policy offers you coverage for the theft, loss or destruction of your personal belongings in the event of a fire, storm or other covered peril. This can help you replace the items you use on a day-to-day basis, from your clothing to your appliances to your furniture—as well as your more expensive items..

• Liability coverage. Life is risk, but that doesn't mean you have to dig deep into your pockets or drain your savings account every time something goes wrong. The liability insurance that comes as a part of your standard renters insurance policy can help protect you if you are sued by a guest injured in your home. Say someone comes over to your house and trips down your stairs, injuring themselves seriously enough to warrant medical attention. If you are found responsible for the accident, your renters insurance liability coverage can help pay for your legal expenses and their medical bills and other damages.

• Additional living expenses. People rarely think about where they'd go or how they'd pay for it if a fire or disaster were to render their rental home unlivable. With a renters insurance policy, you can rest easily because this coverage will help pay for your temporary living expenses. This can include things like hotel bills to restaurants to other living expenses you normally wouldn't incur. With a renters insurance policy, you don't have to worry that a damaged roof will force you to share a house with your in-laws. For that alone, it's a priceless investment.

Common exclusions to homeowners/renters insurance policies• Trampoline exclusion• Firearms Exclusion• Dog bite exclusion• Flood damage exclusion• Sewer back-up exclusion• Home-office coverage limited

Key Words

• Dwelling - type of insurance that covers the structure of your home and the personal property within• Actual cash value - The amount equal to the replacement cost minus depreciation of a damaged or stolen

property at the time of the loss. It is the actual value for which the property could be sold, which is always less than what it would cost to replace it.

• Replacement cost - Simply stated, it means the cost to replace the property on the same premises with other property of comparable material and quality used for the same purpose. This applies unless the limit of insurance or the cost actually spent to repair or replace the damaged property is less.

• Guaranteed/extended replacement cost- The price required to restore or replace the insured asset in the event of an accident or other damage. This policy guarantees the asset to be returned to the original quality and state before the accident or damage occurred. Normal policy limitations are extended to cover full restoration. Also called guaranteed replacement costs.

Performance Activity

Imagine that each of them is getting ready to move into his/her firstapartment with two or three friends. Even though the rental contract states that they should acquire renters insurance, the students’ roommates don’t think that it is necessary. Ask each student to write one or two paragraphs to her/his roommates to explain what renters insurance is, how it works, and why it is important to have.