How Much Coverage Do You Need?Enough to cover:Your Property and Belongings: The better your coverage, the less you will have to pay out of your own pocket if disaster strikes. Show
Self Protection: You need enough liability coverage to protect yourself from lawsuits resulting from your negligence or events that could occur on your property. Lender Requirements: Your housing lender will require you to cover the house for at least the amount of the mortgage or the replacement cost of the dwelling. Policy Requirements: Insurers may impose some coverage requirements for replacement cost protection. Preferred plans usually require policy limits at 100% of replacement cost. Standard plans usually require policy limits of at least 80% of replacement cost. The following chart gives examples of the types of coverage that are usually listed in your insurance policy. These are only examples. PLEASE READ YOUR POLICY TO KNOW YOUR COVERAGES.
Are There Any Additional Coverages I Should Consider?Extra Contents CoverageRemember that most of the coverages are a flat percentage of the amount of insurance on the home itself. For example: contents coverage is 50% of the insurance on the home itself. If you insure your home for $100,000, the contents coverage will be $50,000. For a minimal extra charge, you can increase the coverage on your contents without increasing the amount of insurance on the home itself. Replacement CostMost companies offer "Guaranteed Replacement Cost Coverage" for an additional premium. Ask your agent if this is available and to explain the advantages of having this broader coverage. The most important coverage that is usually offered is full replacement cost coverage on your roof with no deduction for depreciation. Personal Property Extensions of coverageAnother good example concerns special limits on certain types of personal property. For instance, most policies limit their coverage for the theft of furs or jewelry to $500.The limit for firearms or computers is probably $1000. Numerous other items are also typically limited to $500 or $1000 since the homeowners program is designed to fit the coverage needs of the average insured. It is the consumer's responsibility to review the limitations placed on certain types of property. If needed, increase the coverage of one area or another by adding a "Scheduled Personal Property Endorsement" to the basic policy. Additional LiabilityYou can also purchase additional liability coverage and medical payments coverage for a nominal premium. Flood InsuranceThe most important exclusion is flood, as many people have learned to their great misfortune. If you need flood coverage, any property/casualty insurance agent can help you get it. If you live in a flood-prone community, don't risk going without flood insurance. See your broker about flood coverage. Earthquake InsuranceNo standard insurance policy, including the homeowners policy, covers catastrophic damage that can be caused by an earthquake. For an additional premium, companies offer an earthquake endorsement with your homeowners policy that will protect you in case your home suffers earthquake damage. In some areas, this coverage is typically inexpensive and should be considered. For instance, the New Madrid fault runs through the Midwest United States, an area not perceived as having earthquakes occurring frequently. © 1991 - 2018 National Association of Insurance Commissioners. All rights reserved. Which of the following is covered under a dwelling policy?Your policy's dwelling insurance, which is also called Coverage A, is designed to cover the structure of your home, including your roof, the exterior and interior walls, and permanently attached structures like decks.
Which of the following perils would be covered under a dwelling policy quizlet?Which of the following is true under the Dwelling policy? The Basic Form covers the perils of fire, lightning and internal explosion - The Basic Form is written on a named perils basis and does not cover theft, or loss to trees, shrubs, and plants.
What are characteristics of a dwelling policy?Dwelling coverage is one part of your overall home insurance policy. It covers your home's structure —not its contents or land. Features like installed fixtures and permanently attached appliances are also covered. You can select enough dwelling coverage to rebuild your home at today's prices.
Which of the following losses would not be covered by a homeowners policy?Most homeowner policies provide coverage that does not apply to animals, birds, fish, automobiles and business property; for loss or damage caused by flood, surface water, water which backs up through sewers or drains, earth movement, nuclear damage, war, etc.
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