Home Insurance: Articles and Help

There are generally four types of insurance providers:

• Mutual Insurers (insurance companies owned by their policy holders)
• Reciprocal Exchanges (insurance companies wherein customers insure each other)
• Lloyd Associations (a situation where those managing the insurance policies assume personal risk in the performance of the company by having their own wealth invested in the firm)
• HMOs (Health Maintenance Organizations - health insurance companies that offer their customers health coverage for a pre-paid premium)

Your contents should be insured according to the cost of replacement.

Your portion will be calculated according to what is not covered by the claim settlement.

Typically, home insurance covers the domestic purposes of the house, sheds, garages, and greenhouses, and other features on the physical property

GAP insurance is additional car insurance that covers amounts not covered by typical auto insurance providers.

For example, when you purchase a car, its value immediately decreases. If you get in an accident where the car is totaled, the insurance company will only pay the current blue book value of the car. However, you might owe more than the current value, leaving you with a few thousand dollars to cover on your own. GAP insurance will cover the remaining amount you owe; often it may also cover the deductible of your primary auto insurance.

Home insurance, often also referred to as hazard insurance, home-owners insurance or, in the industry, HOI, is intended to protect you financially against damage that might happen to your home, from fire and flood to accidents and criminal activity. It is intended to cover the replacement cost of your home and, with some policies, its contents. When shopping for insurance, ensure that you are familiar with the replacement cost of your home (this could be more than it would cost to buy a comparable home) and read the details carefully to ensure you will not be under-insured if the worst happens. For example:

• Are the contents of your home covered? To what extent? For example, are you covered to buy new replacements for lost or damaged items or only to buy replacements of equivalent age to the originals.
• If you must rebuild your home, are you covered to bring your home up to current building codes?
• Are special articles you care about like art, jewelery, computers, electronics and photographic equipment covered?
• Does your policy cover 'loss of use' - the cost of living somewhere else while your home is repaired or rebuilt?

Note that certain catastrophic disasters like earthquake and flooding are typically not covered by standard homeowners policies. In the event that these events are realistic concerns, separate policies must be taken out to cover you against these risks.

The value of property at the time of loss or damage, minus depreciation.  For example, a 10-year-old refrigerator has a lower ACV than a brand new refrigerator because of a decade of depreciation.

An evaluation of property by an authorized person – typically a claims representative or certified appraiser – to determine property value or damaged property value.

When the insured suffers a loss covered by the insurance company, compensation is paid to the claimant, assignee, or beneficiary. It is not necessarily the case that the beneficiary of the policy should be the individual suffering the loss. Life insurance is the most common example of this.

A type of home insurance policy designed to meet the specific needs of condo owners.  Typically provides coverage for contents, liability, living expenses, and limited structural coverage.  Most condo owners will also need to purchase a Master Policy from their homeowners association; this is often a requirement of the condo association.

The amount an insurance policyholder must pay out of pocket for a covered claim.

The decrease in property value over time due to use, aging and other related factors.

A document or provision added to an insurance policy that changes the original coverage offered in the policy.

 an agreement to insure property and provide liability insurance within certain pre-established parameters.

A representative working on behalf of one or more insurance companies who has been authorized to sell and service insurance contracts.

A contract obligating the insurer to pay for particular losses and provide specific services in the event that certain events take place (such as a car accident, an illness, or a home fire).

The agreed upon amount that a policy holder pays the insurance company for the insurance policy coverage. Depending on the type of insurance, the premium may be payable annually, semi-annually, monthly or even twice a month.

An insurance quote is the estimated amount for the insurance premium for coverage specified in an insurance policy.

Covers insured person for losses caused by events or situations where they are held legally liable.

when a home owner suffers a medically verifiable illness/disability and thus cannot work, this type of insurance covers a specified number of payments.

payments made by the insured in order to own the policy.

Cost to replace damaged personal property or items at current costs without factoring in deductions for depreciation.  (Note: Many policies set a maximum limit for the total dollar amount the insurer will pay out.)

The process insurance companies use to determine if an applicant qualifies for a policy and, if qualified, the associated limits and cost of coverage. The underwriting process will examine the risk characteristics of the person and/ or their proposed activities, the value of the proposed insured property (in the case of life insurance, this will include the insured person's health) and other factors, including current, past or future economic or weather conditions.