By B. E. Conrad
Insurance Shopping - Homeowners' and Renter's Insurance - Auto Insurance - Life Insurance
There are many important purchases in life, but few are as critical to the long term financial well being of an individual or family as insurance. There are many forms of insurance that individuals should consider, and it is important for every individual to carefully consider his or her own insurance needs.
Homeowners' Insurance
The purpose of a homeowners' insurance policy, of course, is to protect the property of the homeowner. The policy also provides liability coverage against damages that may occur to people or property while in the premises. Homeowners' insurance is intended to pay for damages which occur to both the home and its contents, as well as to protect the homeowner from financial liability in the event someone is injured while on the property.
Even though homeowners' insurance is standardized in the United States, there are many different policies available, and these policies are sold through hundreds of different insurance companies and independent insurance agents. Most homeowners' policies cover damage caused by a number of factors, including lightning strikes, fires, falling objects and smoke. In addition, most homeowners' insurance policies cover theft of personal property. It is important, of course for those in the market for such a policy to determine exactly what is excluded from coverage. Standard exclusions include flood damage and earthquake damage, but each policy may have additional exclusions as well.
Insurance companies use two different methods to calculate the payout in the event of a catastrophe which renders the home unlivable. The first is the actual cash value and the other is replacement coverage. The actual cash value provides the actual cost to replace the damaged or destroyed property which comparable new items, less any depreciation.
Replacement coverage, on the other hand, uses the cost of replacing the items lost with an item of the same type and same quality, minus any depreciation. It is important to consider this important distinction when shopping for a policy, and to compare policies accordingly.
Flood Insurance
There has been a great deal of talk in the news recently about the need for flood insurance, and every year many homeowners are shocked to find that their homeowner's insurance policies do not cover damage done by water. It is important for every homeowner living within a designated flood plain to research the need for flood insurance, and to carefully determine just what is, and what is not, covered by such a policy.
Flood insurance is designed to cover damage to buildings caused by flooding, including damage to the foundation, pilings, posts and other critical support structures. This insurance covers those direct physical losses that are caused either by direct flooding or by erosion related to the flooding.
The only guaranteed form of flood insurance available is Federal Flood Insurance. This insurance can be purchased through an insurance company or independent agent. It is important for every homeowner to assess his or her risk of flooding, and to keep in mind that floods can occur even outside designated flood zones. While it is important for every homeowner to at least consider buying flood insurance, such coverage is essential for those who live in flood prone areas.
Renter's Insurance
While the vast majority of homeowners have some form of homeowners' insurance policy in place, the same is not true of those who rent their homes and apartments. Recent statistics have revealed that over half of those who rent have no renter's insurance at all, and those renters may well be flirting with financial ruin by not carrying this important insurance coverage.
Renter's insurance is designed to provide protection from loss in the event of a fire, theft or other disaster. Without this important coverage renters would have to replace the contents of their apartments or rented homes on their own, and out of their own pockets, if those contents were stolen, destroyed in a fire or damaged in a natural disaster.
Many renters are under the mistaken impression that the homeowners' coverage carried by the landlord covers their belongings, but this is actually not the case. That insurance coverage typically covers only the building itself, not the contents. It is important, therefore, for those who rent to look closely at renter's insurance. Depending on the location, the amount of coverage and the terms of the policy, such coverage typically costs only $60 to $200 per year.
Insurance Shopping - Homeowners' and Renter's Insurance - Auto Insurance - Life Insurance
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