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Property Insurance

A homeowner’s insurance policy will cover your family's personal belongings, your home and the contents of your home, such as furniture, appliances, rugs, clothing, etc.

Whether you own or rent, you should make an inventory of all your furniture, appliances, rugs, clothing, furs, jewelry, etc. List every major item and its value. It's best to do this before you buy homeowners insurance, to help you decide how much coverage you'll need to protect your possessions. Most insurance agents have household inventory booklets, prepared by their companies and free for the asking. Get one; it will help with your inventory. Keep a master copy of your completed inventory in a safe place away from home. If a loss should ever occur, the inventory will help you and your insurance company to determine your loss as accurately and quickly as possible.

Your home should be insured for at least 80% of its replacement value. With 80% coverage, the insurance company will pay losses in full, less any deductible, up to the face amount of your policy. If coverage is less than 80% of its current replacement value, a claim is settled on actual cash value---taking depreciation. To adequately insure your dwelling, you must know its replacement value. If you aren't sure of your home's value, play it safe and get help from your agent.

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Keeping Your Insurance Up to Date

Because of the rapidly-increasing cost of home construction and reconstruction, most insurance companies offer homeowners policies that self-adjust to cope with inflation. Such policies automatically increase the limits of your dwelling coverage as building costs increase. Through such a plan, you'll be better able to keep your insurance abreast of inflated costs - and to rebuild if your home is ever destroyed. Without this provision, insurance that once was adequate may pay less than the replacement cost at the time a loss occurs.

You should review your protection regularly, at least once a year, and adjust your insurance coverage according to building costs at the time of your review. Your agent will help you with these decisions.

Remember that the amount of insurance on your home is the basis on which the other policy coverages are determined. Insured amounts on personal property, other unattached structures (such as garage, shed, etc.), and additional living expenses (in case damage makes your home temporarily unlivable) are all set percentages of the amount of insurance on your home. Those percentages can usually be increased with a minor premium adjustment.

For example, your contents are typically covered for 50% of the amount on the dwelling.  If your policy provides $100,000 insurance on your home, your contents will be insured for $50,000.  Homeowners policies provide some coverage for your personal property when it is away from your home. This coverage is generally 10% of the basic amount of protection on the contents, or $1,000 - whichever is greater. If your home is damaged by one of the perils covered by your homeowners policy and you are forced to move temporarily into a hotel or motel, your insurance may pay reasonable additional living expenses.

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Additional Protection

You can request to ‘schedule’ some specified personal belongings. This additional coverage is necessary for expensive items not adequately protected by standard provisions in homeowner’s policies. Such items include cameras, art objects, furs, jewelry, musical instruments, golf equipment, coin or stamp collections, etc. and require substantiated appraisals before they will be included.

Boat owners should carefully check out whether any special coverages are needed. Most insurance companies allow boats and their accessories to be added as a ‘scheduled’ item and provide additional liability protection especially designed for boating use.

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Other Benefits

Personal liability protection is generally a part of most homeowners and renters policy. It protects you against bodily injury and property damage claims arising from accidents to others on property that you either own or rent. It also protects you from accidental damage you may cause to the person or property of others while away from your property. Medical payment insurance may also be included. Protection includes the cost of defending a claim against you.

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Deductible Clauses

Homeowner’s policies include deductibles. There's a $500 deductible in most homeowners forms. This means that you would pay for the first $500 of all losses. Some deductibles may be either reduced or increased at the option of the policyholder. Deductibles save the insurance companies some money, since they eliminate many small maintenance-type claims that are just as expensive to process and settle as larger claims. The savings are passed on to the consumer, who pays less for policies with deductibles.

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Farm Policies

The usual farm operation is not eligible for homeowners insurance, so the insurance industry has developed a similar protective program for farm owners. Its format is very much like the homeowners program.

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Renters Insurance

If you rent an apartment or a house, the renters insurance policy will protect your possessions in the event of loss by fire, theft, or other insured exposure.

Renters insurance is very similar to homeowners insurance except there is no dwelling structure to be covered.

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NAIC Home Insurance Guide

The mission of the NAIC is to assist state insurance regulators, individually and collectively, in serving the public interest and achieving the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members.

Learn more about the NAIC

View the Guide to Homeowner’s Insurance

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National Flood Program

The U.S Congress established the National Flood Insurance Program (NFIP) with the passage of the National Flood Insurance Act of 1968. The NFIP is a federal program enabling property owners in participating communities to purchase insurance as protection against flood losses in exchange for State and community floodplain management regulations that reduce future flood damages.

Learn more about the National Flood Program

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