INSURANCE for Home Owners

There are several types of insurance policies you can purchase.  Please remember that the wording and what is covered may vary within these general categories from one insurance company to another.  Trade names may also be used.

This is the most inclusive home insurance policy; it covers both the building and its contents for all risks, except for those specifically excluded.  There are two types of insurance risks that are not normally included in any home insurance policy - those for which you can buy insurance (*optional, see below), and those for which insurance is not available(*uninsurable peril, see below).

If you are looking to save money by carrying the financial risk of some losses yourself, you may wish to consider a named perils policy that covers only those perils that are specifically stated in the policy.

If the comprehensive policy costs more than you want to pay and the named perils policy seems too risky, a mid-priced compromise is the broad insurance policy.  This policy provides comprehensive coverage on the big-ticket items; like the building and named perils coverage on the contents.

Some insurers offer Non-Standard or "No Frills" coverage for properties that do not meet normal standards.  If there are physical problems with your home that keep it from meeting insurers' standards, you may save money in the long run by correcting these problems in order to qualify for better coverage.

BACKGROUND: In automobile insurance, optional coverage is a commonly used term for insurance that is not required by law, such as coverage for collision or comprehensive claims (eg: theft).

For home insurance, optional coverage is that which is not normally included in standard home insurance policies, but which can be purchased separately, such as coverage for damage from earthquakes, furnace oil spills, and sewer back-ups.

These are events or situations for which insurance coverage cannot be purchased.  The damage as a result of these incidents is usually predictable or preventable.  For example, if you build your house on a flood plain, your house will, at some point, be flooded.  Flooding, in this case, is an uninsurable peril.