As a home owner, one should be responsible in protecting their property financially from disasters and emergencies. Getting insurance for your house is a wise thing to do. But understanding what is covered or what is not can mean a lot of difference of being able to replace your personal belongings or rebuilding your house. As a responsible home owner, one should have an annual check up of insurance policy. This will help make sure to keep up with home remodeling and renovations, local building costs and inventories of personal properties.
By definition, house insurance, properly known as home owners insurance, is an insurance policy which provides financial protection against disasters. Actually, when you are insuring your home, a standard policy insures a) the home itself and its structures; b) and your personal belongings or the things you keep inside the house. This is because home owners insurance is a package. Therefore, home owners’ insurance policies include both damages to your property and the legal responsibility or liability for any injuries and property damaged done by any members of the household (including you) to other people. The policy also includes damages or injuries done by household pets.
There are three ways to insure your house’s structure:
1. Replacement Cost – this is the insurance which pays the policy holder the amount of replacing the damaged property without the deduction for the depreciation, but is limited to a specific maximum amount.
2. Extended Replacement Cost - just like the regular replacement cost, but it extends the maximum limit, usually by 20% to give you protection against sudden increases in construction costs.
3. Actual Cash Value – covers the charge to replace the house minus the depreciation costs due to age and use. As an example, if the life expectancy of your roof is 30 years and it is already 25 years old, the replacement cost of the roof will certainly be much higher than its actual cash value in today’s market.
On the other hand, there are only two ways to insure personal belongings:
1. Replacement Cost – much like of that in insuring the structure of the house, the only difference is that this applies to personal properties.
2. Actual Cash Value – also very much alike of that policy covering the structure of the house. It differs because this applies to personal properties only.
Damages caused by natural disasters may be covered by the insurance policy, but there are exceptions. The most crucial damages are caused by earthquakes (potentially most expensive), flood and storms (most common), and poor maintenance. It is highly recommended to buy separate policies for earthquakes and floods coverage. Damages caused by poor maintenance or misuse are the entire home owner’s responsibility.
Actually, the most vital thing you can do, as a responsible home owner, to protect your house and personal property is to fully understand what is covered by your insurance policies. It also helps to remember that the insurance policy is a very important contract and you must not be hesitant to seek advice from your insurance agent or insurance representative for any questions.
By definition, house insurance, properly known as home owners insurance, is an insurance policy which provides financial protection against disasters. Actually, when you are insuring your home, a standard policy insures a) the home itself and its structures; b) and your personal belongings or the things you keep inside the house. This is because home owners insurance is a package. Therefore, home owners’ insurance policies include both damages to your property and the legal responsibility or liability for any injuries and property damaged done by any members of the household (including you) to other people. The policy also includes damages or injuries done by household pets.
There are three ways to insure your house’s structure:
1. Replacement Cost – this is the insurance which pays the policy holder the amount of replacing the damaged property without the deduction for the depreciation, but is limited to a specific maximum amount.
2. Extended Replacement Cost - just like the regular replacement cost, but it extends the maximum limit, usually by 20% to give you protection against sudden increases in construction costs.
3. Actual Cash Value – covers the charge to replace the house minus the depreciation costs due to age and use. As an example, if the life expectancy of your roof is 30 years and it is already 25 years old, the replacement cost of the roof will certainly be much higher than its actual cash value in today’s market.
On the other hand, there are only two ways to insure personal belongings:
1. Replacement Cost – much like of that in insuring the structure of the house, the only difference is that this applies to personal properties.
2. Actual Cash Value – also very much alike of that policy covering the structure of the house. It differs because this applies to personal properties only.
Damages caused by natural disasters may be covered by the insurance policy, but there are exceptions. The most crucial damages are caused by earthquakes (potentially most expensive), flood and storms (most common), and poor maintenance. It is highly recommended to buy separate policies for earthquakes and floods coverage. Damages caused by poor maintenance or misuse are the entire home owner’s responsibility.
Actually, the most vital thing you can do, as a responsible home owner, to protect your house and personal property is to fully understand what is covered by your insurance policies. It also helps to remember that the insurance policy is a very important contract and you must not be hesitant to seek advice from your insurance agent or insurance representative for any questions.
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