Homeowner’s
INSURANCE
Homeowner’s insurance is more than just
protection from major disasters, such as a fire
or storm. Your policy likely includes a range of
protections that can safeguard your financial
interests in such situations as someone
being injured on your property or having your
belongings lost or stolen.
Get to know your homeowner’s policy and
how it protects you.
Types of coverage
Homeowner’s insurance typically provides
three types of coverage: property damage,
personal property loss and personal liability.
Property damage coverage is meant to
compensate you for damage and destruction
of your home. Personal property loss
compensates you when your belongings are
lost or stolen. Personal liability protects your
assets from lawsuits by someone who claims
you are at fault for their injury.
Know which types of events are covered
in regards to damage to your home. For
example, earthquakes and flooding typically
are not covered. You may be able to buy
additional coverage to cover your living
expenses while your home is being repaired.
Personal property coverage usually excludes
property lost or stolen due to your own
negligence, and if you own certain pricey
items, such as art or jewelry, you’ll probably
need additional coverages for those specific
items. A nice feature of this type of coverage is
that it protects your property no matter where
it’s at — whether it’s in your home or vehicle or
across the world while traveling.
Personal liability coverage usually excludes
situations in which you are the aggressor, such
as a physical altercation.
Valuing your property
When you suffer a loss that is covered
under your insurance policy, you’ll need to
know how your policy specifies that your
REAL ESTATE 101
Escrow or go it alone?
Many loans require that property taxes and
homeowner’s insurance be included in the monthly
mortgage payment. Only conventional mortgages in
which the owner has more than 80 percent equity
usually allow a buyer to pay these expenses on his own.
Otherwise, expect to have these costs included in your
monthly mortgage payment and paid out by the lender
to the insurer through an escrow account.
property be valued. Actual cash value means
the replacement value of the item minus
depreciation. Replacement coverage covers
the full cost of replacing an item without taking
depreciation into account. For example, if you
own a home theater system that cost $1,500
when it was purchased five years ago, a policy
that reimburses you for the actual cash value
might only pay you $700, while replacement
coverage would pay out whatever it costs to
replace the system today.
What’s not covered?
Aside from floods and earthquakes,
there are other situations in which your
homeowner’s policy might not pay out. Other
typical exclusions include war, government
action, earthquake and a poor repair job.
If you have a garage apartment you rent to
tenants and a storm damages the roof, your
tenants’ belongings will not be covered. (The
renters also should have their own renter’s
insurance policy.) You can probably purchase
additional coverage to protect yourself from
liability claims by tenants.
In addition, if you own a business and keep
business-related office equipment or product
inventory in your home, you should check your
policy to see if those items are covered. If it is
covered, the limit is probably low.
18 | Property Lines: At Home edition 2017 | www.dailyastorian.com