California Home Owners FAQ
Frequently Asked Questions
A home can require a tremendous investment of money, time and energy. Homeowners insurance is designed to protect that investment by insuring the actual structure or structures and the personal possessions in and around them, as well as providing liability protection for the residents. Through homeowner’s insurance, you can protect yourself and your family form enormous loss in the event of damage or destruction to your home and property. Most likely, if you have mortgage on your home, you are required to carry homeowner’s insurance.
Deductibles place responsibility for the initial cost of certain claims-and some of the risk-back on the insured. Basically, a deductible is the amount you, must pay out of your pocket before the insurance company will step in and pay for the loss of your property. Your deductible has direct effect on the amount of your premiums. The higher the deductible-that is, the more you have to pay out of your pocket-the lower your premiums will be.
To set the amount of your premiums, the issuing company will first want to assess what kind of risk you might present. Be prepared to share plenty of information about you and your home. The company will consider your credit rating, whether you have a criminal record, your previous addresses, and if you have a history of insurance claims.
An insurer will want to know what kind of work you do, your employment history, your marital status, and your age. An insurer will also want to know about the construction of the home. Is it brick or wood? How many square feet is it? How old is it?
Are there any unattached structures on the parcel? How far is the house from a fire station? Is it perched on the cliff above the ocean? Deadbolt locks, smoke detectors, and other preventive measures can lower your rates. But certain kinds of pets, a pool, and other potential opportunities for personal injury can raise your rates. So can running a home business.
If you want to lower your premium, or buy more coverage for less money, one way is to carry a higher deductible. A higher deductible also may make sense if you believe that your chances of making a claim are remote enough to warrant extra financial risk.
As long as the injury was not due to your negligence and was not intentional, your homeowner’s policy should cover any medical bills and legal expenses, up to the liability policy limits.
Most basic policies protect against damage from: Fire and lighting, Windstorm and hail, Explosion, Riot and civil commotion, Aircraft Vehicles, Smoke, Vandalism and malicious mischief, Theft, Damage by glass or glazing material that is part of a building Volcanic eruption.
You can also step up coverage to include: Three kinds of water-related damage from home utilities or appliances Weight of ice, snow, and sleet Electrical surge damage Falling objects Protection is subject to policy limits and deductibles can vary.
Insurance companies normally use one or two methods to figure out how much you will be reimbursed. The most common calculation is the actual cash value, which is the replacement value minus depreciation. The second calculation is simply the replacement cost of the lost property with no depreciation, but usually with a maximum value. Also, don’t forget that the company will subtract the amount of your deductible from the settlement.
It’s wise to generate a detailed list of your possessions. Making a video or photographic record of your possessions is advisable, as well. You may want to consider storing your inventory in a safe-deposit box off your property, or at least in a lockable fireproof storage box in your home. Not only will a record of your possessions take most of the guesswork out of filing a claim, police say such documentation can help you prove ownership in case your belongings are recovers from a thief. Also, you may want to videotape or photograph the mess after a disaster and before you begin in the cleanup. This can help you prove the extent of damage without having to wait to get your life back in order.
You can purchase additional coverage, through an endorsement to your existing policy or with a separate policy, to extend the limits of coverage for specific items.
Insuring a condominium is different from insuring a house because of the way ownership is structured. A homeowner’s policy covers against losses, and you can only suffer a loss if you have ownership. Because there are areas of common ownership in a condominium complex, your homeowners association may have a master policy. The extent of the coverage you buy will depend on what the master policy covers. The standard homeowner’s policy for condominiums is called HO-6. It will likely cover your personal property, shield you and your family from some types of liability, plus pay to repair any portion of the unit you own under the terms of the condominium or cooperative documents.
In general, a homeowner’s policy will have a named insured, which is usually the owner or tenant named on the deed or lease. The named insurer’s spouse is covered as well, even if he or she is not named on the policy declaration. Other users and residents also may be covered to a lesser extent by the personal property and liability provisions in the policy. For instance, the insurer’s children or someone under 21 in the insurer’s care would likely be covered. Employees such as gardeners or housekeepers may also be covered against loss of personal property on the premises. And you may also extend coverage to your guests if you make a request to your insurance company in advance.
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