Monday, January 23, 2017

The Different Types of Homeowner’s Insurance

There is no one-size-fits-all homeowner’s insurance. Each insurance company has its own coverage types and limitations. When purchasing a homeowners insurance policy, spend time looking at all the options available and also discuss the matter with your insurance broker. He will be able to help you find the right coverage at the right cost. Taking out coverage you don’t need is a waste of money, but not having the protection you require could be disastrous. The following outlines are intended to help you understand the basic homeowner’s insurance types that are available.

Policy Types

  • HO-1: Limited coverage Policy – This is a very basic policy that provides coverage against only a few specific types of disaster. It is no longer available in many states.
  • HO-2: Basic Policy – This is an expanded version of HO-1 that offers protection against a slightly larger range of disasters. There is a version of this available that has been created specifically for mobile homes.
  • HO-3: General Coverage Policy – This is the most common and popular type of policy. It offers protection against all types of risks, excepting those that have been specifically excluded in the policy document.
  • HO-8: Old Home Policy – This policy, designed for older homes provides for compensation for damage on an actual cash basis. This equates to replacement cost less depreciation. In some cases, if the home is very old, full replacement cost coverage may not be available.
  • HO-4: Renter’s Policy – As the names says, this policy is for those who stay in rented homes. It offers protection for all the renter’s possession and any fixtures or fittings, such as new kitchen cabinets, that the renter may have installed at his own cost.
  • HO-6: Condo / Co-Op Policy– This policy provides condo and co-op owners coverage for their belongings in the condo or co-op and also for any parts of the structure that they may own.


The following options are normally available for all types of homeowner’s insurance.

  • Actual Cash Value: This covers the replacement of a home and/or possession with  deduction for depreciation
  • Replacement Cost: This covers the actual cost of replacing a home and/or possession. There is no deduction for depreciation.
  • Guaranteed / Extended Replacement Cost: This is the most comprehensive type of coverage with the greatest protection. Under this option, the policy will cover the full cost of replacing a home to what it was before the loss, irrespective of the actual cost. This means the homeowner is covered even if the replacement cost is greater than the policy limit. This option will normally not cover the cost of upgrading the home to comply with current building codes. However, it is often possible to get an endorsement that will also cover these costs. In some cases, an insurance company may offer an extended replacement coverage instead of a guaranteed one. This will cover replacement cost to a fixed percentage over the policy limit.

If you are planning on purchasing a homeowner’s insurance or want to check if your existing coverage is right for you, consult an insurance professional. He will be able to guide you through the different policy types and options to find the coverage that is right for you.

Wednesday, January 18, 2017

Scam Artists Collect Where Disaster Strikes

A disaster can destroy homes and damage lives and futures. That is bad enough, but what could be even worse are the swarms of scam artists, who arrive on the scene of the disaster, eager to rip off those they can get their hooks into. It is the hurt and vulnerable who are the best victims. Fly-by-night contractors and door-to-door scammers descend like flies when they find innocent people whose misfortunes they can benefit from.

No matter how well prepared you are, a disaster can leave you confused and you could probably be confronted by problems, you never thought of. That is when you are most vulnerable. Staying organized and following procedures will help to keep you safe.

What You Should Do

  • Contact your insurance company as soon as possible. Since there may be many people in the same situation as you, getting through may be difficult. Keep trying.  When you do make contact, state your situation clearly. Have all your policy information at hand. Ask questions to get clarity on any points you do not understand. Maintain a log of all the people you talk to,along with dates, times, and a summary of what was discussed.
  • Make sure all your emails to and from the insurance company are properly sorted and filed safely.
  • Follow the instructions you receive from the insurance company. The procedures can often appear to be a waste of time and frustrating, but insurers have mandatory procedures they must follow and that requirement devolves on their policy holders. By doing exactly what is asked of you, you can avoid a lot of delays and hassles.
  • Document everything. Take pictures of the damage that has occurred. File receipts and records of all the payments you have made after the disaster struck.
  • Once the insurance company accepts your claim, do not relax. It is when you have your guard down that scam artists will strike. Do not be in a rush to get repairs done. Returning to normality fast is tempting, but you need to be sure who you are entrusting the repairs to. In the conditions after a disaster, going online to check out contractors and verify references may be difficult. Do what you can. One thing that is essential, is to contact the Contractors State License Board in your area. You can phone the board at 800-321-2752 or go to the website at to check a contractor’s license.
  • Try to avoid dealing with middlemen. Going to an attorney or hiring a public adjuster should be a last resort. Your insurance company will provide you with an adjuster at no charge to you. Work directly with your insurance company – that prevents miscommunications and needless aggravation. Ask you insurance brokers for assistance if you need it.
  • Do not start any repairs until the adjuster has given a go ahead.

Being Prepared Is Best

Planning for the worst is not being negative – it is a positive act that will help you to overcome the challenges that arise after a disaster. Remember that your insurance broker is there to provide you with the help you need on insurance related issues. Contact him to get a detailed checklist of what you should do if disaster strikes. And if it does happen, he is there to help you.