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