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©
2002 Ruth E. Campbell. |
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Frequently Asked Questions Buying
a Home - Q & A Q: What kind of home insurance should I get?
A: A 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. |