New York Homeowners Insurance


Homeowners insurance is a necessary protection for anyone who owns a home. In case of fire, damage, or other insured peril the insurance company will pay to rebuild or restore your home to the condition prior to the fire or damage, or insured peril up to your limit of coverage and policy contract. Homeowners insurance protects you against the risk of losing your home to a fire, and financial burden of property damage to the dwelling, and loss of your personal belongings or protection against liability. Homeowners insurance is also required if you are a homeowner with a mortgage. The insurance you carry with a mortgage might be sufficient to protect your bank or lenders but may not offer you sufficient protection. Therefore it is important to calculate your needs and to get adequate protection for these needs. 

There are 2 basic types of homeowners policies. Comprehensive homeowners, also known as "Special Form," and Standard or Basic, also known as "Named-Perils." Both types cover damage for a range of perils or damage to your home. Comprehensive costs a little more however, you are protected for more perils that cause damage to your home. A Named Perils policy lists all the perils that will be covered, and only those specific perils named in the policy. This means you can't collect, and are not covered for perils which are not included in the list or named as covered perils in your policy. Most people prefer the Special Form policy, which basically says you're covered for everything unless it's specifically excluded. A Special Form or Comprehensive policy usually doesn't cost much more than a standard or named perils policy. However read the exclusions in a Comprehensive policy very carefully since some perils are excluded. In case you ever have to file a claim you may be surprised to discover that a peril you thought was covered is not covered, and is excluded from your policy. Coverages vary from company to company, and availability will vary, depending where you live, and the likelihood, or prediction of certain perils. Also remember, as a homeowner you are expected to reasonable take care of your home, and provide maintenance for things like worn roofs or leaky pipes for example, before the situation becomes critical.

Protection and price should be your main concern when buying home insurance. The proper level of coverage consists of buying the proper levels of protection for your home with special provisions for jewelry and other valuables that supplements the standard coverage plus protection for other perils not covered in a basic policy.

Consider the replacement value of your personal property. Over time some of your personal property will depreciate, while other personal property might increase in value. You may be able to get a policy with automatic inflation adjustments to maintain the current and future replacement costs of your most valuable possessions. Also ask yourself if you have certain possessions (computer equipment, cameras, jewelry for example) whose replacement value far exceeds the normal coverage for personal property in your policy. For relatively small amounts, you can purchase "floaters" that will add protection to cover the replacement of certain types of personal property. In addition, equipment related to a home business may not be covered at all or may not be satisfactorily covered by a standard policy. 

A basic or standard policy usually insures your possessions at 50 percent of the value of your dwelling. Most people increase this coverage to a higher percent. But there are still individual limits on certain types of personal property. Check with your insurance company or agent to find out what these limits are. Remember you should always assess your needs to determine if you want to pay extra amounts to increase the standard levels of protection.

Also consider what would happen if you were to lose the use of your home for an extended period of time. Loss-of-use provisions are important elements of homeowners insurance. You may want to increase your coverage levels to 30 percent or more of your dwelling's insurance for added protection.

If someone not covered under your health insurance policy were to suffer a serious injury in your home and you were found liable how would you stand? The standard level of liability insurance for homeowners has been around 300,000 but you should consider raising this level of protection amount to at least 500,000 or more especially if you are an affluent homeowner with many assets to protect. In this situation "umbrella" policies provide excess liability coverage on both your homeowners and automobile policies. These are not generally that expensive but you need to carry both auto and homeowners insurance with the same insurer or insurance company.

Remember your deductible also determines your homeowners rates. To save money but for greater risk you may want to get a higher deductible for your policy. This is a risk you need to consider if you can afford a higher deductible. If you want to save yourself some money, increase your deductibles. Deductibles can range from $100 to $1,000. By accepting a $500 deductible instead of $250, you might save 10 to 20 percent off the cost of your home insurance policy.

Homeowners insurance policies provide for other types of coverage, including off-premises theft protection and unauthorized use of your credit cards. Understand all the provisions you are paying for and which are included in the standard coverage and which require supplemental premiums.

Perils are the possible causes of a loss: fire, windstorm, hail, theft, and vandalism are examples of some perils. Risk is the chance of loss.

There are usually two ways in which insurance companies settle a claim to your property. They are usually referred to as "Actual Cash Value" and "Replacement Loss." 

If your policy pays Actual Cash Value in the event of a covered loss the insurance company will pay the current replacement cost of whatever you lost, minus depreciation (which generally includes the estimated wear and tear on the item damaged or the loss in value of that item because of aging and use). The total amount you can expect to get paid for is subject to the terms and limits of your policy.

If you have Replacement Cost Coverage, in the event of a covered loss, you may be reimbursed for the cost you incur to replace the damaged property with similar property, brand new. The total amount you can expect to get reimbursed for is subject to the terms and limits of your policy.

In addition homeowners insurance polices have "Deductibles" and "Coverage Limits," which apply to your home and other structures, as well as your personal property. Liability coverage on your home usually does not has a deductible.

A deductible is your out of pocket expense or the portion of the loss you agree to pay. Deductibles are a means for insurance companies to keep insurance rates as reasonable as possible. This also helps to eliminate minor claims which would otherwise increase the general cost of insurance.

Insurance companies also set limits on the amounts they will pay to settle a covered loss. This enables companies to properly price insurance. This is known as Coverage Limits which are specified in your policy or contract.

It is important to realize that insurance polices contain conditions, and if you don't abide by them, you can't collect. For example, if you're away from home for a few days during the heating season, you may need to have the water turned off, or have a neighbor check your house daily. Otherwise, if your pipes burst, you may not be covered for any damage. Or, if you leave your house vacant for example, if you've moved and are trying to sell it. You would need to let your insurance company know and make arrangements to protect your home. Make sure you fully understand the conditions of your policy.
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