Unit 6.3 Part 3 Homeowners Insurance

1. Unit 6.3 Part 3 Homeowners Insurance Dollars & Sense

2. WHY DO I NEED HOMEOWNERS INSURANCE? • Your home is likely to be the biggest investment you will ever make. Losing this asset would cause a financial disaster if you don’t protect it with insurance.

3. The Components of Basic Homeowners Insurance

4. What does basic homeowners insurance cover? • Dwelling – Coverage that protects the structure of the home (roof, walls, wall-to-wall carpeting, etc.). • Other structures– Coverage for sheds, detached garages and other structures not connected to the main dwelling itself.

5. What does basic homeowners insurance cover? cont • Personal Property –Coverage for personal items (clothing, furniture, appliances, computers, etc.). Provides coverage on and off the premises. • Loss of Use– Coverage for when an insured has to move out of the home while repairs are made as a result of damage caused by a covered loss.

6. What does basic homeowners insurance cover? cont. • Liability Insurance – Pays for damages the insured is legally obligated to pay due to bodily injury or property damage. • Medical Payments – Pays for medical and/or funeral expenses incurred by a person on or off the insured’s property.

7. What does basic homeowners insurance cover? cont. • Most homeowners insurance contracts normally include coverage for the following items, but this can vary by company and state. Check your policy to be sure what is and what is not covered. • Trees, shrubs, plants and lawns – Coverage is provided to these items if damaged by a covered loss. • Debris removal – Coverage for removing the remains or rubbish of any property destroyed as a result of a covered loss. • Fire Department Charges – Provides coverage for customary fire department charges under contract or agreement. May be subject to limits depending on your policy.

8. Perils Covered by Homeowners Insurance • Fire and lightning • Windstorm and hail • Explosion • Riot and civil commotion • Impact from aircraft • Impact from vehicles • Smoke • Vandalism and malicious mischief • Theft • Falling objects • Weight of ice and snow • Glass breakage • Accidental overflow of water from plumbing • Accidental electrical damage to appliances (caused by power surge)

9. Perils NOT Covered by Standard Homeowners Insurance(You may need purchase a separate policy!!) • Flood • Hurricane or windstorm • Earthquake • Acts of terrorism or war

10. ADDITIONAL COVERAGES* • Jewelry, watches, furs • Guns • Tools • Cameras, camcorders • Silver, gold, pewter • Money, coins, securities, deeds • Watercraft, trailers, equipment, motors • Computers • Business property * Coverage for these items is already included in the homeowners insurance policy up to certain limits. For an additional premium, you can increase the limits of these coverages to meet your needs.

11. LIABILITY COVERAGE • Protects your family and anyone under age 21 in your care • Protects you against legal claims you are legally obligated to pay for causing bodily injury, sickness, disease or death of others • Pays the cost of defending a claim against your • Covers damage to the property of others

12. GUEST MEDICAL PAYMENTS • Covers first aid expenses of others • Provides for accidental death benefits

13. Protecting Your Personal Property:Two Options for Homeowners Insurance

14. # 1: Actual Cash Value • Definition: The value of the property lost or damaged at the time of the loss. This method of valuation takes into consideration depreciation based on such factors as: • Age of the item • Market value • Condition of the property at the time of loss or damage.

15. #2: Replacement Cost • Definition: The cost of replacing damaged or destroyed property without deduction for depreciation in the value of the property.

16. STEPS TO PROTECTING YOUR PROPERTY 1) Take an inventory 2) Compare quotes 3) Select your coverage 6) Select a provider and apply 4) Ask about disaster coverage in your area 5) Check for discounts