Home Insurance
What kind of home insurance should I get?
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.
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