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Protect Yourself by Conducting a Home Inventory
When you live in the Snow Belt, the crisp air and brilliant colors of fall remind you that a snowy winter is just a breath away. And in the winter, bad weather conditions--or perhaps an untended fireplace--may wreak havoc on your property. If your household possessions are damaged or destroyed, you'll have a hard time recalling the price (and description) of every item unless you have a thorough home inventory on hand.
What is a home inventory?
Continue reading "Protect Yourself by Conducting a Home Inventory" »
Glossary of Homeowner Insurance
Actual cash value: the worth of a damaged or stolen item at the time of the loss.
Additional living expense coverage : pays for some additional living costs (i.e. motel, restaurant) if you must live elsewhere while repairs are being made to your damaged home.
Continue reading "Glossary of Homeowner Insurance" »
What is the relationship between title insurance and homeowner'sinsurance?
Title insurance and homeowner's insurance protect against totally different types of risks.
Homeowner's insurance covers loss or damage to the home, other structures, and the personal property contents of the home, as well as third-party liability.
Title insurance protects ownership interests in the real property. Title insurance is to guarantee that you have good and marketable title to the property -- that your interest in the property is superior to all others. When purchasing a home through proceeds of a loan, lenders require you to obtain title insurance. That way they know that you have clear ownership of the real property and the home.
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As the insured, you and the members of your home are covered for the loss of the home and its contents. Third parties -- other people who come to your home -- are covered through the liability portion of the insurance policy for injuries caused by your negligence. In addition, you and the members of your household have some liability protection to others even while you are away from the premises.
With renter's insurance, it is important to note that coverage is only provided to the person named in the policy. Even if you share the premises with someone else -- if it is your insurance, the property of your "roommate" is not covered.
What is the difference between a dwelling policy and a homeowner's policy?
A homeowner's policy is a package which covers loss not only to the dwelling structure, but other structures on the land, personal property contained in the dwelling, and liability to third parties who come onto the dwelling and surrounding land. In its purest form, a dwelling policy covers only the dwelling structure itself -- providing a much smaller amount of coverage. Though not very common, dwelling policies are used in some areas of the country to insure seasonal homes that are unoccupied for part of the year.
What kinds of risks does homeowner's/renter's insurance protect you against?
The major risks covered by homeowner's insurance are:
1. damage or loss to the home itself, as well as other structures on the land;
2. damage or loss to the items of personal property in the home and other structures; and
3. injury or harm to third parties (typically guests and others who come to your home).
The major risks covered by renter's insurance are damage or loss to items of personal property contained in the residence and liability to third parties who are injured while in the residence.
The particular risks covered depend upon the type of policy purchased, as discussed below.
What is the connection between risk and the insurance company?
Insurance is a contract between the insured (you) and an insurance company that protects against the risk of large catastrophic loss. If a light bulb burns out in your hallway, that's a small loss. If an electrical fire destroys a room, that's a large catastrophic loss.
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Just like homeowner's insurance, renters face risks of loss. Sure, since a renter does not own the dwelling unit, she does not risk the residence itself. As a renter, the greatest risk is damage to or loss of personal property. Renters can also be liable to third parties that are injured while at the residence.
If you rent, insurance acts as a risk transfer device to protect you against a catastrophic loss. In exchange for payment of a premium, you transfer the risk of property loss and liability to third parties to an insurance company.
Why buy homeowner's insurance?
There are two major reasons for homeowners to buy insurance:
1. as one of -- if not the -- most important assets that a person has, you need to protect your home from damage and destruction
2. mortgage lenders require homeowners to carry insurance to protect the lender's investment from damage or loss
Just like homeowner's insurance, renters face risks of loss. Sure, since a renter does not own the dwelling unit, she does not risk the residence itself. As a renter, the greatest risk is damage to or loss of personal property. Renters can also be liable to third parties that are injured while at the residence.
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Continue reading "Why buy renter's insurance?" »
Why buy homeowner's insurance?
Two major reasons for homeowners to buy insurance:
1. as one of -- if not the -- most important assets that a person has, you need to protect your home from damage
and destruction
2. mortgage lenders require homeowners to carry insurance to protect the lender's investment from damage or loss
Protect Yourself by Conducting a Home Inventory
When you live in the Snow Belt, the crisp air and brilliant colors of fall remind you that a snowy winter is just a breath away. And in the winter, bad weather conditions--or perhaps an untended fireplace--may wreak havoc on your property. If your household possessions are damaged or destroyed, you'll have a hard time recalling the price (and description) of every item unless you have a thorough home inventory on hand.
What is a home inventory?
Continue reading "Protect Yourself by Conducting a Home Inventory" »
Glossary of Homeowner Insurance
Actual cash value: the worth of a damaged or stolen item at the time of the loss.
Additional living expense coverage : pays for some additional living costs (i.e. motel, restaurant) if you must live elsewhere while repairs are being made to your damaged home.