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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