Insurance law: An overview
HOMEOWNERS BASICS
What is homeowners insurance? What is in a standard homeowners insurance policy? Are there different types of policies? What type of insurance do I need for a co-op or condo? What type of disasters are covered? Can I own a home without homeowners insurance? What is renters insurance? How do I take a home inventory and why? What's the difference between cancellation and nonrenewal?
What type of disasters are covered?
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Most homeowners policies cover all disasters listed below. Some policies provide coverage only for the first 10 listed. Check your insurance policies for the "perils" covered.
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| Dwelling & personal property | Dwelling
| Personal property
| Dwelling & personal property |
Perils | Basic HO-1*+ | Broad HO-2* | Special HO-3* | Special HO-3 | Renters HO-4 | Condo/ Co-op HO-6 | Modified Coverage HO-8 |
1. Fire or lightning | x | x | x | x | x | x | x |
2. Windstorm or hail | x | x | x | x | x | x | x |
3. Explosion | x | x | x | x | x | x | x |
4. Riot or civil commotion | x | x | x | x | x | x | x |
5. Damage caused by aircraft | x | x | x | x | x | x | x |
6. Damage caused by vehicles | x | x | x | x | x | x | x |
7. Smoke | x | x | x | x | x | x | x |
8. Vandalism or malicious mischief | x | x | x | x | x | x | x |
9. Theft | x | x | x | x | x | x | x |
10. Volcanic eruption | x | x | x | x | x | x | x |
11. Falling object | | x | x | x | x | x | |
12. Weight of ice, snow or sleet | | x | x | x | x | x | |
13. Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance. | | x | x | x | x | x | |
14. Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system. | | x | x | x | x | x | |
15. Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance. | | x | x | x | x | x | |
16. Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component) | | x | x | x | x | x | |
All perils except flood, earthquake, war, nuclear accident, landslide, mudslide, sinkhole and others specified in your policy. Check your policy for a complete list of perils excluded. | | | x | | | | |
* HO-1, HO-2 and HO-3 refer to standard Homeowners Policies.
+HO-1 has been discontinued in most states. |
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- Floods
You can purchase flood coverage directly from your homeowners insurance agent. However, the policy is provided by the Federal Flood Insurance Program ( 800-427-4661, http://www.fema.gov/nfip ).
You can get replacement cost coverage for the structure of your home, but only actual cash value coverage is available for your possessions. There may also be limits on coverage for furniture and other possessions stored in your basement.
Flood insurance is available for renters as well as homeowners. You will need flood insurance if you live in a designated flood zone. But also consider buying it if your house could be flooded by melting snow, an overflowing creek or water running down a steep hill. Don’t wait until the evening news announces a flood season warning to buy a policy. There is a 30-day waiting period before coverage takes effect.
- Earthquakes
Earthquake coverage can be a separate policy or an endorsement to your homeowners or renters policy. It available from most insurance companies. In California, it is also available from the California Earthquake Authority ( http://www.cea.gov ). In earthquake prone states like California, the policy comes with a high deductible.
- Maintenance damage
It is your responsibility to take reasonable precautions to protect your home from damage. Your insurance policy will not cover damage due to lack of maintenance, mold, termite infestation and infestation from other pests.
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