NBGS ONLINE City
Everything you wanted to know about insurance products … but were afraid to ask.
© NBGS Online 2010

What You Need To Know About

Home Insurance

Typically included in a homeowners’ insurance policy are coverage from damages resulting from water/flooding, hail, windstorm, fire, riots and explosions. Extra cost of living in a different place where the structure is being rebuilt or repaired, theft or other causes of loss are also covered. Legal liabilities (up to policy limits) are also covered by your policy if you, a member of your family or your pet hurt anyone or their property in or away from your house. For more information on umbrella policies and general liability coverage, click here. Tips for Insuring Your Home to Value You should insure your home to the cost of rebuilding it, that is, the total amount to rebuild your home if it were destroyed, not to the market value as the cost of rebuilding may be lower or higher than it could be sold for or the price for which it can be sold today due to certain factors like inflation, or deflation etc. Your company may pay only a portion of what it cost to replace or repair damaged items if you do not have sufficient insurance. To ensure you have sufficient insurance, here are some tips: To get immediate estimates of what it would cost to rebuild your home: your house’s total square footage should be multiplied by the costs per square foot of local buildings. You can consult a reputable builder or the local builders association to establish the building rates in your area. Also check with your company representative or insurance agent. (Note: this should not replace annual coverage reviews as it is just an estimate.) Factors that determine the cost for rebuilding your home: a. Construction cost b. Square footage of the structure c. Type of exterior wall construction – masonry or veneer, frame d. House style (colonial, ranch) e. Number of rooms and bathrooms f. Roof type g. Attached fireplace, exterior trim, garages and special effects such as unique interior trim or arched windows. On a yearly basis, or at least periodically, check your insurance policy’s value against the increasing local cost of building. Find out from your company representative or insurance agent if they provide an “INFLATION GUARD CLAUSE.” The dwelling limit is automatically adjusted to reflect current construction costs when you renew your policy. Also check the most recent building codes in your community. These codes require structures to be built to minimum standard. They differ with locality and are reviewed or upgraded from time to time. Were your home to be damaged severely by any of the factors listed above, you might have to have it rebuilt to the current standards even if it demands a change in building materials or design and may cost more. You should ensure your insurance covers your rebuilding cost. This is very important or you may not get the mortgage you seek as most lenders demand your insurance covers your mortgage amount. Where you make any additions or improvements to your house, advise your insurer and increase your policy’s limit.
House
NBGS ONLINE
Everything you wanted to know about insurance products … but were afraid to ask.
© NBGS Online

What You Need To

Know About

Home Insurance

Typically included in a homeowners’ insurance policy are coverage from damages resulting from water/flooding, hail, windstorm, fire, riots and explosions. Extra cost of living in a different place where the structure is being rebuilt or repaired, theft or other causes of loss are also covered. Legal liabilities (up to policy limits) are also covered by your policy if you, a member of your family or your pet hurt anyone or their property in or away from your house. For more information on umbrella policies and general liability coverage, click here. Tips for Insuring Your Home to Value You should insure your home to the cost of rebuilding it, that is, the total amount to rebuild your home if it were destroyed, not to the market value as the cost of rebuilding may be lower or higher than it could be sold for or the price for which it can be sold today due to certain factors like inflation, or deflation etc. Your company may pay only a portion of what it cost to replace or repair damaged items if you do not have sufficient insurance. To ensure you have sufficient insurance, here are some tips: To get immediate estimates of what it would cost to rebuild your home: your house’s total square footage should be multiplied by the costs per square foot of local buildings. You can consult a reputable builder or the local builders association to establish the building rates in your area. Also check with your company representative or insurance agent. (Note: this should not replace annual coverage reviews as it is just an estimate.) Factors that determine the cost for rebuilding your home: a. Construction cost b. Square footage of the structure c. Type of exterior wall construction – masonry or veneer, frame d. House style (colonial, ranch) e. Number of rooms and bathrooms f. Roof type g. Attached fireplace, exterior trim, garages and special effects such as unique interior trim or arched windows. On a yearly basis, or at least periodically, check your insurance policy’s value against the increasing local cost of building. Find out from your company representative or insurance agent if they provide an “INFLATION GUARD CLAUSE.” The dwelling limit is automatically adjusted to reflect current construction costs when you renew your policy. Also check the most recent building codes in your community. These codes require structures to be built to minimum standard. They differ with locality and are reviewed or upgraded from time to time. Were your home to be damaged severely by any of the factors listed above, you might have to have it rebuilt to the current standards even if it demands a change in building materials or design and may cost more. You should ensure your insurance covers your rebuilding cost. This is very important or you may not get the mortgage you seek as most lenders demand your insurance covers your mortgage amount. Where you make any additions or improvements to your house, advise your insurer and increase your policy’s limit.
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