Walbeck Insurance in Indiana, PA Can Help You Choose
Whether you are a homeowner, apartment owner or renter, it is important to have the appropriate type and amount of property and casualty insurance coverage.
So all you have to do is visit your local insurance agent and buy a standard homeowner’s policy and you’re adequately covered, right? Not necessarily. Depending on your circumstances, you might need a Special HO-3 policy with guaranteed replacement cost coverage; or a Condo/Co-op HO-6 policy with extended replacement cost coverage; or a Renters HO-4 policy with actual cash value coverage; or a Deluxe HO-5 policy with extended guaranteed replacement cost coverage.
“Some people are surprised at what is covered by their insurance,” said Jeanne Salvatore, a spokeswoman for the Insurance Information Institute. “And some are surprised at what isn’t.”
Ms. Salvatore said there are two broad considerations for choosing property and casualty insurance: what risks the policy covers and what amount of coverage it provides. As for the type of risks that are covered, she said, policies generally fall into two subcategories: named peril and all peril. The former policies, she said, specify the risks that are covered and exclude everything else, while the latter specify risks that are not covered but include everything else.
Most “homeowners policies” – a generic term that also applies to policies available to condo owners, co-op shareholders and renters – are identified by the code “HO” followed by a number.
The most basic policy – the HO-1 – provides protection against losses caused by fire, lightning, windstorm, hail, explosion, riot, smoke, vandalism, theft and damage caused by aircraft, vehicles and even volcanic eruptions.
And while that list might appear to be comprehensive, there are other risks that are not covered by such a policy. For example, Ms. Salvatore said, in addition to insuring perils covered by an HO-1, an HO-2 generally will cover damage caused by other “named perils” like falling objects and the weight of ice, snow or sleet; leaks from plumbing, heating, air-conditioning and fire-sprinkler systems; cracking, bursting, burning or freezing of such systems; and sudden and accidental damage to fixtures or appliances caused by an electrical discharge.
Even better than an HO-2, she said, is an “all peril” HO-3 or HO-5 policy. Both cover the structure for all risks except those specifically excluded, with the latter providing broader coverage for contents than the former. Typically, Ms. Salvatore said, an HO-3 or HO-5 policy excludes coverage for damage caused by flood, earthquake, war, nuclear accident, landslide, mudslide and sinkholes. Some insurers now exclude or limit coverage for mold, she added.
Ms. Salvatore said that co-op and condo owners can get coverage similar to homeowners’ by purchasing an HO-6 policy, and that renters can get coverage for their contents under an HO-4 policy.
Eric S. Koch, a partner in an insurance agency in Paterson, N.J., said that while most agents will recommend all-peril policies, there may be times when it is difficult to obtain that level of coverage. “Sometimes, with inner-city properties, you can only get a basic named-peril policy,” he said.
It is also possible that homeowners who have owned their property for many years without updating their coverage may have a named-risk policy.
“There are so many policies out there that people haven’t looked at for 20 years,” Mr. Koch said. “Someone could have a basic policy and not even know it.”
If you need a new homeowner’s insurance policy or just would like to review your current homeowner’s insurance policy, give Walbeck Insurance Agency in Indiana, PA a call at 724-479-9378 or visit www.walbeckinsurance.com.
Article credit: http://www.nytimes.com/2005/05/08/realestate/08home.html?_r=1&ref=homeownersinsurance
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