Home Owner Insurance

A home owner insurance policy provides protection against damages to your property or personal possessions. Policies cover the structure of your home, personal possessions, liability and additional living expenses.

Most home owner insurance policies cover damages caused by:

Theft

Fire and lightening

Smoke

Frozen pipes

Ice and snow

Meet with an insurance broker, call several insurance agencies or use the internet to compare policies before making a purchase. You can get a home owner insurance online quote or from an agency or broker. Thoroughly read the policy before signing, to determine what is not covered and to make sure you have sufficient coverage. You don't want to find out you have insufficient coverage in the event you need to make a claim.

Inventory all possessions in your residence. You can use a digital camera or video camera to record each item. Store the information in a fire safe box.

It is important to understand the difference between actual cash value policies and replacement cost policies before purchasing a home owner insurance policy.

Actual cash value

The policy pays to replace home or possessions less depreciation.

Replacement cost

The policy pays the cost to rebuild, repair or replace without factoring in depreciation.

For example, if your three year old computer is stolen, and you have an actual cash value policy, the insurance company will pay you an amount equivalent to a three year old computer. If you have a replacement cost policy, the insurance company pays you to replace the stolen computer with a new one.

In ground swimming pools, trampolines, using your property as a business or having rental units attached to the property, will increase premiums. As will living in a flood plain or coastline area.

Home owner insurance premiums can be reduced by installing fire alarms, burglar alarms, smoke detectors or upgrading electrical or plumbing. Increasing the deductible should decrease premiums as should including your car insurance coverage with the same insurance carrier.

A home owner insurance policy does not cover flood or earthquake damage. Additional polices or insurance riders will need to be purchased to cover floods and earthquakes as well as to insure jewelry, art work, stamp and coin collections, computers or other valuable possessions not included in your regular home owner's insurance policy.