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standard homeowners policy protects against
fire, lightning, wind, storms, hail, explosions,
riots, aircraft wrecks, vehicle crashes,
smoke, vandalism, theft, breaking glass,
falling objects, weight of snow or sleet,
collapsing buildings, freezing of plumbing
fixtures, electrical damage and water damage
from plumbing, heating or air conditioning
systems, according to the Insurance Information
Institute, a Washington, D.C.-based nonprofit
group for the insurance industry.
Such
policies are "all-risk" policies,
which cover everything except earthquakes,
floods, war and nuclear accidents.
A
basic policy can be expanded to include
additional coverage, such as for floods
and earthquakes and even workers' compensation
for servants or contractors. Home-based
business-coverage, an increasingly popular
rider, does not cover liability associated
with the business.
Insurance
experts recommend that homeowners obtain
insurance equal to the full replacement
value of the home. On a 2,000-square-foot
home, for example, if the replacement
cost is $80 per square foot, the house
should be insured for at least $160,000.
For
personal items, homeowners can increase
their coverage beyond the depreciated
value of items such as televisions or
furniture by purchasing a "replacement-cost
endorsement" on personal property.
Some
experts recommend an inflation rider,
which increases coverage as the home increases
in value. |
