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Home Insurance: The Basics

By
Mortgage and Lending with Julie Chroust, Senior Loan Officer Bay Equity LLC NMLS #249458


Mind Your Money

Home Insurance: The Basics


A home is probably the most valuable asset you will ever own, so it must be protected with adequate insurance. The basic homeowner insurance policy covers against damage from thunderstorms, lightning, fire, smoke, burglary, defacement of property, civilian chaos, vehicle or aircraft damage, and volcanic eruptions. More comprehensive policies cover against damage by earthquakes, floods, ice, sleet or the malfunction of an air conditioner or heating unit.

Condominium owners are typically required to have an insurance policy that only reimburses them for loss of their belongings. The condo association should provide structural insurance, which covers the roof, outside and adjoining walls.

There are two primary types of home insurance:

  1. Actual cash value coverage pays the value of property or belongings at the time they were lost, taking into account their age and depreciation.
     
  2. Replacement cost coverage provides enough money to replace lost or damaged property or belongings with new items at cost.

Usually there are replacement-cost limits for certain expensive items, such as jewelry, artwork, antiques and home office equipment. Consult your insurance agent about taking out individual riders for additional coverage on these possessions.

It’s wise to keep an itemized record of household contents, noting their value, date of purchase and description. Valuables should also be photographed or video taped. This will help determine their replacement cost.

Experts suggest that a home be insured for at least 80% of what it would cost to replace at its current value. Finally, a homeowner policy should be reviewed every year. If you have made any improvements, or the home value has increased, more insurance may be required.

Home insurance, as well as other types of insurance, are now available through MetroPro Insurance Solutions. Learn more or apply online by clicking the insurance services ad found on the left-hand side of this email.

Always consult with a licensed insurance provider before making any changes to your home insurance policy.

Comments (3)

Geoff ONeill
John L. Scott Medford - Medford, OR

Nice post.  I don't often see insurance posts on Activerain.

Mar 26, 2010 02:14 AM
Matthew Naumann
Exit Realty Charleston Group - Goose Creek, SC
Goose Creek, SC Real Estate Agent

Julie,

Great Post. It is definitely something all new homeowners need to take into consideration.

Thanks for sharing,

Matt Naumann

Mar 31, 2010 01:04 AM
Regina P. Brown
MBA Broker Consultants - Carlsbad, CA
M.B.A., Broker, Instructor

Julie, this is a great topic that is often overlooked.  One thing you mentioned was to "keep a record" of items in the house.  May I suggest that you NOT keep this record IN the house?  In case it burns down... thanks for posting here at http://activerain.com/groups/virtualoffice

Apr 02, 2010 06:29 AM