Home insurance

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Home insurance , also called homeowner insurance (often abbreviated in the US real estate industry as HOI ), is a type of property insurance covering a residence personal. This is an insurance policy that incorporates a variety of personal insurance coverage, which may include any losses incurred in a person's home, its contents, loss of use (additional living expenses), or other personal property loss from homeowners, as well as liability insurance for accidents that may occur at home or in the hands of the homeowner within the policy area.

In addition, homeowners insurance provides financial protection against disasters. A standard home insurance policy guarantees the house itself along with the items stored in it.

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Ikhtisar

The policy of the homeowner is a multiple-line insurance policy, which means that it includes property insurance and liability coverage, with an inseparable premium, which means that a single premium is paid for all risks. This means that it includes property damage and a person's liability for injury and property damage caused by the owner or members of his family to others. It may also include damage caused by domestic pets. The US uses a standard policy form that divides coverage into categories. The coverage limit is usually provided as a percentage of the main Coverage A, which is the scope for the primary residence.

The cost of homeowner insurance often depends on the cost to replace the house and which are supported or additional drivers attached to the policy. An insurance policy is a legal contract between an insurance carrier (an insurance company) and a named (insured). This is a compensation contract and will put the insured back to the state he was before the loss. Typically, claims due to floods or wars (whose definitions usually include nuclear explosions from any source) are excluded from coverage, among other standard exceptions (such as termites). Special insurance can be purchased for these possibilities, including flood insurance. Insurance is adjusted to reflect replacement costs, usually on the application of the inflation factor or cost index.

Pricing

The main factors in price estimation include location, coverage, and amount of insurance, which is based on the estimated cost of rebuilding the house ("replacement cost").

If insufficient coverage is purchased to rebuild the house, the payment of the claim may be subject to a co-insurance penalty. In this scenario, the insured will be charged out of pocket as a penalty. Insurers use vendors to estimate costs, including subsidiaries CoreLogic Marshall Swift-Boeckh, Verisk PropertyProfile, and E2Value, but leave responsibility ultimately to consumers. In 2013, a survey found that about 60% of homes were less appreciated by about 17%. In some cases, estimates may be too low due to "demand wave" after a disaster. As protection against false estimates, some insurance companies offer add-on "endorsements" that provide additional coverage if the limit is reached.

The price may be lower if the house is located next to a fire station or equipped with a fire sprinkler and a fire alarm; if the house shows wind mitigation measures, such as storm leaves; or if the house has a security system and has a key approved by the insurance company.

Usually payment is made every year. Endless unlimited unlimited insurance can also be obtained in certain areas.

Cover danger

Home insurance offers coverage on the basis of "named harm" and "open dangers". The so-called "danger policy" is a policy that provides liability for losses specifically included in the policy; if not listed, then not covered. The "open hazard" policy is wider in the sense that it will provide coverage for all losses except those specifically excluded on your policy.

The "danger named" basis - this is the least comprehensive of the three coverage options. It provides protection against the hazards that are most likely to result in total loss. If something happens to your house that is not on the list below, you are not covered. This type of policy is most common in countries with developing the insurance market and as protection for empty or empty buildings.

Basic forms that include hazards:

• Api
• Lightning
• Wind storm or hail
• Explosion
• Smoke
• Vandalism
• Airplane or vehicle collision
• Riot or civil commotion

Area of ​​"named danger" - this form extends to "basic shape" by adding 6 additional hazards. Again, this is a "danger named" policy. The loss must be specifically registered to receive coverage. Fortunately, the "wide shape" is designed to cover the most common form of property damage.

Wide range of hazards:

• All basic form hazards
• Theft, sudden damage
• Fall objects (eg tree branches)
• Ice and snow weight
• Plumbing freeze
• Accidental water damage
• Generally produced electricity

Specifically "all risks" - custom form coverage is the most inclusive of the three options. The difference with the "special form" policy is that they provide coverage for all losses unless specifically excluded. Unlike previous forms, all unregistered hazards include hazards. However, if something happens in your home, and the event is on the exceptions list, the policy will not provide coverage.

Custom forms that do not include:

• Legal Ordinance
• Earthquake
• Flood
• Power failure
• Ignore
• The war
• The nuclear danger
• Deliberate action

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In the United States

In the United States, most home buyers borrow money in the form of mortgage loans, and mortgage lenders often require buyers to purchase homeowners insurance as a condition of the loan, to protect the bank if the house is destroyed. Anyone with an insurable interest in the property should be listed on the policy. In some cases, the mortgagee will rule out the need for mortgagor to bring homeowner insurance if the value of the land exceeds the amount of the mortgage balance. In such cases, even the total destruction of any building will not affect the ability of the lender to be able to recover and recover the entire loan amount.

Home insurance in the United States may differ from other countries; for example, in the UK, the sinking and subsequent failure of the foundation is usually covered under the insurance policy. Insurance companies in the United States usually offer basic insurance, which is reduced to coverage for damage caused by leakage, and eventually eliminated altogether. Insurance is often misunderstood by the buyer; for example, many believe that the mold is included when it is not a standard coverage.

History

The first homeowner policy per se in the United States was introduced in September 1950, but a similar policy already exists in the United Kingdom and certain regions of the United States. In the late 1940s, US insurance laws were reformed and during this process some written line laws, allowing homeowners policies to be legal.

Before the 1950s there was a separate policy for the various dangers that could affect the home. A homeowner must purchase a separate policy that includes fire losses, theft, personal property, and the like. During the 1950s a form of developed policy allowed homeowners to buy all the insurance they needed at one complete policy. However, this policy varies by insurance companies, and is difficult to understand.

The need for standardization grew so great that a private company based in Jersey City, New Jersey, the Office of Insurance Services, also known as ISO, was formed in 1971 to provide risk information and issue simplified homeowner policy forms for resale to insurance companies. These policies have been changed over the years.

Modern developments have changed insurance coverage, availability, and pricing. Homeowner insurance is relatively unfavorable, in part because of disasters such as hurricanes and regulators' reluctance to legitimize price increases. Coverage has been subtracted instead and the company has deviated from the standard ISO form of the previous model. Water damage due to broken pipes has been particularly limited or in some cases completely eliminated. Other restrictions include time limits, complex replacement cost calculations (which may not reflect actual costs to replace), and a reduction in wind damage coverage.

Policy

Homeowner insurance was first introduced in the 1950s. Currently, most homeowners insurance policies are based on forms developed by the Office of Insurance Services ( ISO ) and the American Insurance Services Association ( AAIS ).

HO0 - Dwelling Dwelling Form

A form that provides home protection against fire, smoke, hurricanes, hail, lightning, explosions, vehicles, and civil unrest. It does not include personal property, personal liability, or guaranteed medical expenses. This is the kind of policy a mortgage lender will buy for the borrower if this last owner's policy aberrations.

HO1 - Basic Forms

Basic policy form that provides home protection against 11 registered hazards; content is generally included in this type of coverage, but it should be mentioned explicitly. Hazards include fire or lightning, hurricanes or hail, vandalism or evil delinquency, theft, damage from vehicles and aircraft, explosions, civil unrest or riots, broken glass, smoke, volcanic eruptions, and personal responsibility. Exceptions include floods, earthquakes. Most states no longer offer this type of coverage.

HO2 - Broad Shape

More advanced forms that provide home protection against 16 registered hazards (including the 11th in HO1). Coverage is usually a "named danger" policy, which lists the events to be discussed.

HO3 - Special Form

The most common and most comprehensive form used for single-family homes. This policy provides coverage of all "risks" at home with some non-inclusive issues, such as earthquakes and floods. Its contents are covered with a base called danger. (Note: "all risks" are not termed properly because they are essentially called exceptions (ie, if not exclusively excluded, they are covered).

HO4 - Contents Area

Broad Content, or Charterers, a form for tenants. This includes personal property against the same dangers as the content of HO2 or HO3. HO4 generally also covers liability for personal injury or property damage inflicted on others.

HO5 - Comprehensive Form

Covers the same with HO3 and others. In this policy the contents are covered on an open hazard basis, therefore as long as the cause of the loss is not specifically exempted in the policy it will be borne for the cause of the loss.

HO6 - Unit-Owner Form

Forms for condo owners. This guarantees personal property, walls, floors and ceilings against all hazards in the Broad Shape. The remainder of the condominium is covered by a separate policy purchased by the association.

HO8 - Modification Cover Form

This form is for the old owner occupied house whose replacement cost far exceeds the market value of the property.

Rate of coverage

According to 2015 (2014) National Association of Insurance reports (NAIC) data from 2012, 76.8% of houses are covered by owner-occupied homeowners policies. Of these, 62.9% had Special HO3, and 9.4% had Comprehensive HO5 which was more expensive. Both of these policies are "all risks" or "open hazards", meaning that they cover all risks except those specifically excluded. 2.7% is Area of ​​HO2, which only covers certain named hazards. Others, each about 1%, include HO1 Basic and HO8 Modified, which are the most limited coverage. HO8, also known as older home insurance, is likely to only pay the actual cash value for compensation rather than replacement.

The remaining 21.3% of the home insurance policy is covered by renters or condominium insurance. 14.8% of them have the form of HO-4 Fill Area, also known as tenant insurance, which includes the contents of an apartment that are not specifically covered in a blanket policy written for the complex. This policy may also cover the liability arising from injury to the guest as well as the loss of the tenant within the coverage area. Common coverage areas are events such as lightning, riot, airplane, explosion, vandalism, smoke, theft, hurricanes or hail, falling objects, volcanic eruptions, snow, hail, and heavy ice. The rest have a HO-6 Owner-Owner policy, also known as condo insurance, designed for condominium owners and includes coverage for a part of the building owned by the insured and for the property held therein. Designed to reach the gap between the coverage provided by blanket policies written for the entire environment or private buildings and property in the home. Condo association laws can determine the total amount of insurance required. For example, in Florida, coverage coverage is defined by law - 718.111 (11) (f).

In addition, about 1.9% of homes are covered by house fire policies (the term fires stemming from the fact that, initially, the homeowners policy only covers fires) which includes property damage to structures and are usually sold to non-commercial owners of rented houses. It can also cover the owner's personal property (such as equipment and furniture). The owner's liability may be extended from their own primary home insurance and, as such, may not include part of the Dwelling Fire Residents policy.

It should be noted that not all countries allow ISO forms to be used or may require additional clauses to be included to comply with state insurance regulations.

Usually consumers can save money by purchasing their insurance directly from the company rather than through an agent, but not many companies are selling home insurance directly. However, experienced agents can provide expertise (especially expertise with the local insurance environment) that may not be owned by the company.

Classification of scope

Although coverage limits may vary, there are 6 core coverage components that form the standard policy in the United States. This is based on the standards of the Office Insurance Service or the American Association of Insurance Services forms.

Part I - Property Coverage

Coverage A - Habitable

Includes the value of the dwelling itself (excluding land). Typically, the coinsurance clause states that as long as the occupancy is insured up to 80% of the actual value, the loss will be adjusted for replacement cost, up to the policy limit. It's in place to provide a buffer against inflation. HO-4 (tenant insurance) usually does not have Coverage A, although it has additional coverage for improvement.

Coverage B - Other Structures

Includes other structures around properties that are not used for business, except as a private garage. Usually limited to 10% to 20% of Coverage A, with additional amounts available through authentication.

Coverage C - Private Property

Includes private property, with limits for theft and loss of certain classes of goods (e.g., $ 200 for money, banknotes, bullion, coins, medals, etc.). Usually 50-70% of Coverage A is required for the content, which means that the consumer can pay more insurance than is necessary. This has led to several calls for more choices. There are two types of policies for private property: the cash value policy and the replacement cost policy. The cash value policy will pay a fee to replace the item, less depreciation. The replacement cost policy will reimburse the guaranteed cost, the current cost of replacing the goods.

Coverage D - Loss of Use/Additional Living Costs

Includes costs associated with additional living expenses (ie rental fees) and fair lease value, if a portion of the residence is rented, but only rental income for lease space is not actually a service provided such as utilities.

Part II - Liability Cover

Coverage of E - Personal Liability

Covering the insured damage is legally liable for and provides a legal defense of the cost of the insurer itself. About a third of the losses for this coverage come from dog bites.

Coverage F - Medical Payment

Designed to pay medical expenses for another person who was injured accidentally at an insured location or by the activities of an insured employee, resident, or animal owned by or in the care of the insured. This payment is not based on the law of negligence; ie, no negligence from the insured party should be proven that payment should be made.

Part III - Additional Coverage Options

Flood Insurance

Flood damage is usually excluded under the homeowners insurance policy and the standard tenant. Flood coverage, however, is available in the form of separate policies both from the National Flood Insurance Program (NFIP) and from several private insurance companies.

Earthquake Disruption

The Earth Movement is a general exception to home insurance policies around the world. Separate policies, riders or attorneys should normally be purchased for these risks to be covered. Because of the disastrous nature of these risks, earthquake-related coverage is usually supported by some form of government organization or specialized organization to assist with the payment of claims and regulations.

Supplemental Coverage

Includes various costs such as clearing of debris, reasonable repairs, damage to trees and shrubs for certain named hazards (excluding the most common causes of damage, wind and ice), fire department costs, property transfers, credit/the cost of identity theft, loss assessment, collapse, furniture of the owner, and some additional buildings. This varies depending on the form.

Part IIII - Exceptions

In an open hazard policy, special exemptions will be expressed in this section. These generally include ground movements, water damage, power failure, negligence, war, nuclear danger, septic tank reserve costs, accidental loss, and co-occurrence (for HO3). Concurrent causal exclusions do not include losses in which losses are covered and excluded losses occur. Additionally, exceptions to rule building can mean that increased costs due to local regulations may not be covered. A 2013 survey of Americans found that 41% believe the fungus is closed, although it is not usually covered if water damage occurs over a period of time, such as through leaking pipes.

Cause of loss

According to the 2008 Insurance Information Society fact book, for every $ 100 of the premium, in 2005 an average of $ 16 went to fire and lightning, $ 30 for wind and hail, $ 11 for water damage and freezing, $ 4 for other causes , and $ 2 for theft. An additional $ 3 goes to obligations and medical payments and $ 9 for claims settlement fees, and the remaining $ 25 is allocated for insurance fees. One study of fires found that most were caused by warming incidents, although smoking was a risk factor for fatal fires.

Claim process

After a loss, the insured person is expected to take steps to reduce the loss. Insurance policies usually require that insurance companies be notified within a reasonable time frame. After that, the claim adjuster will investigate the claim and the insured may be required to provide various information.

Claim submission may result in tariff increases, or non-infringement or cancellation. In addition, insurance companies may share claims data in industrial databases (the two main ones are CLUE and A-PLUS), with Claims Suspension Suspend (CLUE) by Choicepoint receiving data from 98% of US insurers.

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In the United Kingdom

As in the US, mortgage lenders in the UK (UK) require a recondition value (actual cost to rebuild property to the current state if damaged or destroyed) of the property to be borne as a condition of the loan. However, the cost of rebuilding is often lower than the market value of the property, because market value often reflects the property as a business continuity, compared to only the value of bricks and mortar.

A number of factors, such as increasing fraud and increasingly unpredictable weather, have seen home insurance premiums continue to rise in the UK. For this reason, there is a shift in how home insurance is bought in the UK - as customers become more price sensitive, there has been a massive increase in the number of policies sold through price comparison sites.

In addition to standard home insurance, about 8 million households in the UK are categorized as "nonstandard" risks. These households require special or non-standard insurance that will cover the needs of home insurance for people who have a criminal conviction and/or where the property has decreased or previously been sustained.

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Worldwide

Premium volume by country (2013)

Building and content coverage

Countries like China, Australia, and the UK use a simpler approach to home insurance, called "building and content coverage" commonly called "home and content insurance". In conjunction with US insurance policies, building and content coverage offer very basic coverage rates. Most standard policies cover only the most fundamental dangers listed below:

• Storm or flood
• Fire
• Lightning or explosion
• Tree or branch fall
• Subsidence, drag, or landslide
• Glass damage or sanitary equipment
• Damage from water or lost oil
• Shock caused to home by animal, vehicle or airplane

Building scope

The building includes both the main structure and the separate structure such as the garage, the warehouse, and the back houses on the property. However, different insurance companies may not cover things like barriers, fences, gates, paths, drives or swimming pools, so it's important to check the language of certain policies. This is equivalent to Coverage A and B in the homeowners insurance policy in the United States.

Content coverage

The contents of insurance covers personal effects such as furniture, clothing, electronics, jewelry, etc. Most policies limit the amount of individual money paid for each category of goods. Individual policies may vary in the amount of coverage they provide. The option to schedule your personal property is already available.

Coverage of obligations

Obligations are usually grouped together with building and content coverage. Injuries and on-site damage will be borne by liability for building insurance while any offsite event will be covered within the scope of the content.

General exceptions

Like most insurance policies, there are always exceptions. The most common are:

• General wear and tear treatment
• Work is broken
• Mechanical or electrical shutdown
• Any amount exceeds the limit displayed on the policy schedule or in the
policy
• Closed caps when the house is empty or left to be a renter

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See also

• Mortgage insurance
• Home equity protection
• Property insurance
• Tenant insurance

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References

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External links

Source of the article : Wikipedia