18 Questions
What type of structures may need separate coverage in a homeowner's insurance policy?
Freestanding garages and sheds
What percentage of the structure's insurance value is typically provided for interior coverage by most insurance companies?
50% to 70%
What is protected by liability coverage in a homeowner's insurance policy?
Visitors to the property and pets
What type of natural disaster may require additional coverage in a homeowner's insurance policy?
Floods and earthquakes
What is the primary purpose of purchasing additional coverage for expensive possessions?
To ensure you're covered in case of a disaster
What happens to your bed if a tornado strikes your house and it's completely ruined?
It's likely to be entirely gone
What is the primary purpose of homeowners insurance?
To insure the value of the home's structure and personal belongings
What type of event is typically NOT covered by a standard homeowners insurance policy?
Flood damage
What is one benefit of having liability coverage in a homeowners insurance policy?
Financial protection against accidents or injuries that occur on the property
What type of damage is typically covered by a homeowners insurance policy?
Exterior damage caused by a hurricane
What is an additional layer of protection that homeowners may need to purchase separate from their standard policy?
Flood insurance
What is one of the four things that homeowners insurance usually covers?
Loss or damage of personal assets/belongings
What affects the policy price in a neighborhood with high crime rates?
Higher risk of damage or theft
What happens to your premium and coverage if you opt for a higher deductible?
Your premium decreases, and coverage decreases
Why might your policy rates be higher if you bought your home after multiple previous owners?
Because the previous owners had lots of previous claims
How can you save money on insurance costs?
By searching for discounts such as bundling home and auto
What should you do to get the best insurance price?
Shop around and compare prices
Why is it important to research an insurance company's background?
So you know how easy they are to work with
Study Notes
Homeowner's Insurance
- Homeowner's insurance covers the value of a home's structure and its contents, as well as providing liability coverage against accidents in the home or on the property.
- Insurance typically covers four things: interior damage, loss or damage of personal assets, injury that occurs on the property, and exterior damage.
Types of Events Covered
- Damage due to fire, hurricanes, lightning, vandalism, and other disasters listed in the policy plan.
- If one of these events occurs, the insurer will compensate the homeowner to repair or rebuild the house.
Types of Events Not Covered
- Destruction or damage from floods, earthquakes, and poor home maintenance is generally not covered in the insurance policy.
- These events require separate coverage plans to be purchased if the homeowner wants added protection.
Coverage for Possessions
- Most insurance companies provide interior coverage for 50% to 70% of the amount of insurance on the structure of the home.
- For example, if a house is insured for 200,000,therewouldbeupto200,000, there would be up to 200,000,therewouldbeupto140,000 worth of coverage for possessions.
Liability Coverage
- Homeowner's insurance also provides liability coverage for the property, protecting against lawsuits filed by others.
- This coverage includes pets and visitors to the property.
Insurance Payments
- The deductible relates to the premium and coverage, with a higher deductible resulting in a lower premium and lower coverage.
- Homeowners can save money by bundling their home and auto insurance or searching for discounts.
Getting the Best Price
- Know what you want and shop around for quotes from different insurance companies and agents.
- Research the companies' backgrounds and ask friends and family about their experiences.
- Meet with insurance agents to see if you can work with them.
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