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Friday, June 14, 2013

A Closer Look At Home Insurance

By Theo Danier


For most people, their home is the most expensive item they own. When an unfortunate disaster happens, is your home protected from things like fire or earthquake? Have you gone over your home insurance policy lately? Each year, you should visit your insurance provider to make sure that your coverage is adequate. Many times, a homeowner has a different situation later than they did when they first got the policy, and each year it should be reviewed.

There are two main kinds of home insurance plans:

Named perils: These policies specify the types of loss you're protected against, such as fire, lightning, explosion, smoke, falling objects, impact by aircraft or land vehicle, riot, vandalism, some types of water damage, windstorm, hail, and theft. You are only protected from the types of loss and damage that is specifically named on your insurance policy.

Second is Comprehensive: What it means is that there are a few specific exceptions, but everything else is covered. Landslide, snow slides, and damages from war or terrorism are some of the things that usually are not included. Comprehensive insurance policies provide a homeowner with the highest level of protection, and should be the choice that people opt for.

There are a few crucial aspects of your policy that you should review:

Guaranteed building replacement: If you own a home, this coverage guarantees that your policy will pay to rebuild your home, even if it's over the policy limit. With market fluctuations, and catastrophic events such as wildfires and earthquakes, the cost to rebuild your home can increase dramatically from the amount you originally insured it for.

Earthquake damage insurance: Many policies will allow you to pay more and get additional earthquake coverage. The possibility of an earthquake is always present no matter where the home is located, so look into protection just in case.

Broad water damage protection: Traditional insurance companies usually include some form of water damage protection. Sewer backup is usually not included in this for example, but it can be included if the homeowner would like to add it to the policy.

Building bylaw coverage: In the event of a loss, your home must be rebuilt to comply with today's building codes and bylaws. Even if your home is only being partially reconstructed, the building regulations need to be taken into account since they have likely changed over the years. Unless this coverage is taken out, the costs from a rebuild such as this will have to be paid by the homeowners. Many people forget to get coverage such as this. The cost difference could be many thousands, that come out of the homeowner's pocket.



Specialty property insurance: There is a certain amount of coverage provided for specialty items in most policies, even if the homeowner doesn't have any. These items include sporting equipment, bicycles, computers, cell phones, jewelry, furs, silverware, and collectible items.

Something to keep in mind for condo owners: The strata itself typically has insurance, but there are certain kinds of damage that are not covered, and property deductible assessments, damage assessments, and liability damage assessments can be the responsibility of the condo owners themselves.




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2 коммент.:

  1. That is a really good point. I will have to look into my home insurance plan here in Colorado. I hope that it covers everything though, and if it doesn't I think that it might be worth upgrading.

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