[Replay] Risk Management and Insurance Basics, Part IX

May 9, 2023 by gjsturm88 1 Comment

Over the next few weeks, we’ll revisit our multi-part series on risk management and the basics of different insurance plans! This week, we’ll return and continue our discussion on homeowner’s insurance.

Last week we discussed the first four forms of coverage from your homeowner’s insurance policy. If you haven’t had a chance to view that post, you may want to go back and check that out before proceeding, with the link here!

Fifth is personal liability coverage. This will provide coverage when you or someone living with you are liable for bodily injury or property damage to others on your property.

Sixth, and closely related to the previous coverage, is medical payment coverage for any medical bills incurred by people invited to your dwelling who are injured on your property as a result of your personal activities.

For those with renter’s insurance, your policy will generally include those last four coverages – personal property, loss of use, bodily injury liability, and medical payment coverage.

Now that we’ve discussed the different coverages of a homeowner’s insurance policy, what exactly are you covered against? For protection to your dwelling and any other structures on your property, this depends on which type of policy you have. While we won’t spend the time to cover all of the specific differences of HO-1, HO-2, all the way through HO-8, it’s important to understand that not all homeowner’s policies are the same. Some only cover a small number of named risks (HO-1), some cover additional named risks (HO-2), some cover a broader range of risks and only exclude specific perils (HO-3, H0-5), and some are specialized for specific dwellings like insurance for renters (HO-4), condos (HO-6), mobile homes (HO-7), and older homes (HO-8).

Regardless of which policy you have, two risks that are rarely covered in a standard homeowner’s insurance policy, that can be prevalent depending on where you live, are earthquakes and floods. Additionally, maintenance issues for things such pest damage, rust, rot, and most, are generally not covered by homeowner’s insurance.

Lastly, here are some additional homeowner’s insurance tips. Paying your premium annually will often reduce the cost, but be sure you have no issues paying for that large cost each year, particularly if your insurance policy is not being paid directly from a mortgage escrow account. Check for any discounts for safety devices such as alarm systems and smoke detectors. Select a deductible that isn’t too high for you to save for, but not so low it results in an unnecessarily high premium. If your home is in a flood zone, consider purchasing separate flood insurance. If you’re not sure if you’re located in a flood zone, check out FEMA’s Flood Map Service Center, linked here. Lastly, for any insurance claims, be sure to document any and all damages!

That concludes our discussion on homeowner’s insurance, we’ll return next week to discuss life insurance!