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Homeowner's insurance provides financial protection
against disasters. A standard policy insures the home itself and
the things you keep in it. It covers both damage to your property
and your liability or legal responsibility for any injuries and
property damage you or members of your family cause to other people.
This includes damage caused by household pets.
A standard homeowners policy includes four types of
1. COVERAGE FOR THE STRUCTURE OF YOUR HOME
This part of your policy pays to repair or rebuild
your home if it is damaged or destroyed by disasters listed in your
policy. Most likely, it will not pay for damage caused by a flood,
earthquake, or routine wear and tear.
Most standard policies also cover structures that
are detached from your home such as a garage, tool shed or gazebo.
Generally, these structures are covered for about 10% of the amount
of insurance you have on the structure of your home.
Some banks require you to buy homeowners insurance
to cover the amount of your mortgage. If the limit of your insurance
policy is based on your mortgage, make sure it’s enough to
cover the cost of rebuilding. If your mortgage is paid off, don’t
cancel your homeowners policy. Homeowners insurance protects your
investment in your home.
2. COVERAGE FOR YOUR PERSONAL BELONGINGS
Your furniture, clothes, sports equipment and other
personal items are covered if they are stolen or destroyed by fire
or other insured disaster. This part of your policy includes off-premises
coverage, which means that your belongings are covered anywhere
in the world. Expensive items like jewelry, furs and silverware
are covered, but there are usually dollar limits if they are stolen.
To insure these items to their full value, purchase a special personal
property endorsement or floater and insure the item for its appraised
value. Coverage includes “accidental disappearance,”
meaning coverage if you simply lose that item, and there is no deductible.
3. LIABILITY PROTECTION
Liability covers you against lawsuits for bodily injury
or property damage that you, your family members, or your pets cause
to other people. If you or a family member accidentally ruins your
neighbor’s expensive rug, you are covered. However, if they
destroy your rug, you are not covered.
The liability portion of your policy pays for both
the cost of defending you in court and any damages a court rules
you must pay, up to the limit of your policy. You are covered not
just in your home, but anywhere in the world.
Liability limits generally start at about $100,000.
However, experts recommend that you purchase more coverage. You
can purchase an umbrella or excess liability policy which provides
broader coverage, including claims against you for libel and slander,
as well as higher liability limits.
Your policy also provides no-fault medical coverage.
In the event a friend or neighbor is injured in your home, he or
she can simply submit medical bills to your insurance company. This
way, expenses are paid without a liability claim being filed against
you. It does not, however, pay the medical bills for your family
or your pet.
4. ADDITIONAL LIVING EXPENSES
In the event you are temporarily unable to live in
your home because of a fire or other insured disaster.
This pays the additional costs of temporarily living
away from home if you can't live there due to damage from a fire,
storm or other insured peril. It covers hotel bills, restaurant
meals and other living expenses incurred while your home is being
rebuilt. If you rent out part of your house, this coverage also
reimburses you for the rent that you would have collected from your
tenant if your home had not been destroyed.
Homeowner's insurance F.A.Q.
Q: Can I own a home without homeowners
A: Yes, however, if you have bought your home and financed
the purchase with a mortgage, your lender will most
likely require you to have homeowners insurance coverage.
Lenders need to protect their investment in your home
in case your house burns down or is badly damaged by
a storm, tornado or other disaster.
If you live in an area that is likely
to flood, the bank will also require you to purchase
flood insurance. Some financial institutions may also
require earthquake coverage if you live in a region
vulnerable to earthquakes. If you buy a co-op or condominium,
your board will probably require you to buy homeowners
After your mortgage is paid off, no one
will force you to buy homeowners insurance. It is not
advisable, however, to cancel your policy and risk losing
what you’ve invested in your home.
Q: Am I covered for flood damage?
A: No. So, if you live in a flood-prone area it may
be wise to purchase flood insurance. Flood insurance
is provided by the federal government, under a program
run by the Federal Insurance Administration. In some
parts of the country, homes can be damaged or destroyed
by mudslides. This risk is also covered under flood
Q: If water seeps into my basement
from the ground, am I covered?
A: No. Water seepage is excluded under most homeowners’
policies. Also, if the water seepage is not due to a
flood you will not be covered under a flood policy.
Seepage is viewed as a maintenance issue and is not
covered by insurance. You should see a contractor about
waterproofing your basement.
Q: Am I covered for earthquake
A: No. Earthquake coverage is sold as additional coverage
to the homeowners policy.
Q: A neighbor slips on my sidewalk
or falls down my porch steps and threatens to take me
to court for damages. Does my policy protect me?
A: Yes. The policy will pay for damages, if a fall or
other accident on your property is the result of your
negligence. It will also pay for the legal costs of
defending you against a claim. Also, the medical payments
part of your homeowners policy will cover medical expenses,
if a neighbor or guest is injured on your property.
You should check to see how much liability protection
you have. The standard amount is $100,000. If you feel
you need more, consider purchasing higher limits.
Q: I have children away
at college. Are they covered by my homeowners insurance?
A: If they’re full-time college students and part
of your household, your insurance generally provides
some coverage in a dorm, typically 10 percent of the
contents limit. If they live off campus, some companies
may not provide this limited coverage if the apartment
is rented in the student’s name.
If you have purchased a condo or co-op, the bank
will require insurance to protect its investment in your home. You
may, however, need more insurance to cover your personal items,
liability or fees that may be charged to you regarding shared areas
of the building like the lobby.
You will need two separate policies to protect
1. Your own insurance policy.
This provides coverage for your personal possessions, structural
improvements to your apartment and additional living expenses
if you are the victim of fire, theft or other disaster listed
in your policy. You also get liability protection.
2. A "master policy" provided
by the condo/co-op board.
This covers the common areas you share with others in your building
like the roof, basement, elevator, boiler and walkways for both
liability and physical damage.
To adequately insure your apartment, it is important to know which
structural parts of your home are covered by the condo/co-op association
and which are not. You can do this by reading your association’s
bylaws and/or proprietary lease. If you have questions, talk to
your condo association, insurance professional or family attorney.
Sometimes the association is responsible for insuring
the individual condo or co-op units, as they were originally built,
including standard fixtures. The individual owner, in this case,
is only responsible for alterations to the original structure of
the apartment, like remodeling the kitchen or bathtub. Sometimes
this includes not only improvements you make, but those made by
In other situations, the condo/co-op association is
responsible only for insuring the bare walls, floor and ceiling.
The owner must insure kitchen cabinets, built-in appliances, plumbing,
wiring, bathroom fixtures etc.
Also ask your insurance professional
about the following additional coverages:
1. Unit assessment
This reimburses you for your share of an assessment charged to
all unit owners as a result of a covered loss. For instance, if
there is a fire in the lobby, all the unit owners are charged
the cost of repairing the loss.
2. Water back-up
This insures your property for damage by the back-up of sewers
or drains. Water back-up may not always be included in a policy.
Check to see that it is included.
3. Umbrella liability
This is an inexpensive way to get more liability protection and
broader coverage than is included in a standard condo/co-op policy.
4. Flood or earthquake
If you live in an area prone to these disasters, you will need
to purchase separate flood and earthquake policies. Both flood
and earthquake insurance can be purchased through your insurance
Floater or endorsement
If you own expensive jewelry, furs or collectibles, you might consider
getting additional coverage since there is generally a $1,000 to
$2,000 limit for theft of jewelry on a standard policy.
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5005 200th ST SW, Suite 200 B, Lynnwood, WA 98036
Phone: (425) 673-7948 Fax: (425) 673-7942
IMPORTANT NOTE: This Web site provides only a simplified description
of coverages and is not a statement of contract. Coverage may not
apply in all states. For complete details of coverages, conditions,
limits and losses not covered, be sure to read the policy, including
all endorsements, or prospectus, if applicable. Please feel free to
contact us for further information.