Home Insurance - Protecting your home against damage
Homeowners insurance, sometimes known as hazard insurance, often covers a large number of eventualities, and there are many different types of homeowners' insurance policies, each tailored to a specific event. Basic home insurance policies offer personal insurance protections, including losses which occur to the policy holder's belongings, or home, loss of the use of their home, i.e., additional living expenses, and liability insurance for any accidents which occur on the property.
Home insurance policies are often abbreviated in the real estate industry to the simple acronym HOI, and can come in a bewilderingly different array of policies. Home insurance policies will also spell out exactly under which circumstances you can expect them to pay out, and many basic policies will not cover such things as fire, floods, war or acts of God, and separate insurance policies, such as fire, flood or hurricane insurance, can be purchased against this eventuality. The cost of home insurance policies vary, depending upon the items insured and how far the cover extends. Home insurance policies are normally term contracts, and last for a given amount of time, with a premium paid each term. The price of the premium depends upon the perceived damage to the home; for instance, if your home is located near a fire station, and has a good system of sprinklers, or is protected from theft by a good security system, your premiums will be lower. Protecting your home from damage is something you should think about, as many of the methods used are relatively simple and expensive, and would make for a decent saving on home owners insurance premiums. In America, when one takes out a mortgage on a home, it's normally required that home owners insurance is in place, in order to make sure that, should anything happen, the mortgage lender will not suffer a loss. If the value of the land alone is enough to recuperate the loss even if the house is damaged, home owners insurance might not be necessary. If you do decide on home owners insurance, which is highly recommended, everyone with a vested interest in the property should be named on the policy.
If your home is located in an area that is at high risk of floods, hurricanes or other natural disasters, purchasing the relevant insurance is an important consideration. Your land does not need to be near a coastline to be at risk from flooding; flash floods can occur when a higher than average rainfall occurs within a very short period of time, and large bodies of water such as lakes are also considered a flood risk.
Choosing home insurance used to be a fairly complex process; however, in 1971, the Insurance Services Office or ISO began standardizing home owners insurance, and currently, there are seven specific types, which are referred to as HO-1 through to HO-8, which HO-7 missing. The objective of the Insurance Services Office is to make insurance policies more comprehensible, among other things. The Insurance Services Office also monitors regulatory standards and insurance laws, and communicates with regularity authorities.
Your local insurance agent will vary depending upon your state and zip code - for instance, home owners insurance in Dallas will need to be handled by a different company than if you wished to purchase home owners' insurance in Chicago, New York, Boston or Phoenix - but there are many ways of finding out exactly who you need to contact. It's important to get home owners' insurance quotes from a wide variety of insurers before finally deciding on one, as the quotes given for the insurance policy can differ between insurance brokers.
Flood Insurance - Basic information on flood insurance
Flood insurance is a specific kind of insurance policy that protects your property against damage caused by flood, something that, contrary to the beliefs of thirty-three percent of Americans, can be excluded on general home insurance policies.
If you live in an area which is at a high risk of flooding, insurance against flood damage is something you should definitely consider. Insurance companies which offer policies which protect against flood damage will usually use topographical maps to understand the exact risk of flood damage that your home is under. Many insurance companies in the US do not offer flood insurance to everyone at risk, and to fix this, the National Flood Insurance Program or NFIP was created.
The objective of the National Flood Insurance Program, which is managed by the FEMA, or Federal Insurance & Mitigation Administration, is to allow everyone at risk of flooding to insure their property against flood damage. Participation in the National Flood Insurance Program is based on agreement between the federal government and local communities, and states that if a community prepares for the possibility of flooding, and adopt a flood plan management ordinance to reduce flood risks to new constructions in Special Flood Hazard Areas or SFHA's, the federal government will ensure that flood insurance is available to members of that community.
In the UK, particularly in light of recent events, flood insurance has a number of benefits, although, again due to previous events, flood insurance premiums are higher than average at the moment. If you are already a flood insurance policy holder, then your flood insurance policy will compensate you for the loss or damage of all covered items. In the US, you will still be compensated, even if the President does not declare a federal disaster. Flood payments will be dealt with swiftly, and you can even request an emergency payment immediately after a flood to help you recover from the damage even more quickly.
A flood is defined by the National Flood Insurance Program of America as "a general or temporary condition of partial or complete of two or more acres of normally cry land area or of two or more properties, at least one of which is the policy holder's property", and can be caused by a number of things. Mudflow, overflowing inland or tidal waters, unusual accumulation of surface waters from any source or the collapse of land along the shore of a lake can result in a flood. Although floods are far more common on land which is nearer to the ocean or large bodies of water, flash floods are also possible, and occur when an unusual amount of rain falls within a short time.
The effect of urbanization and, with more and more concrete roads and parking lots replacing natural land means that the lands natural ability to absorb water is decreased. This, combined with changing weather patterns, has made floods more likely, and more severe, as the recent flooding in England and New Orleans has shown. Floods don't necessarily need to be dramatic or contain a lot of water to damage your belongings; a single inch of water can cause costly damage to your home, and only a few feet of water is enough to carry your car away.
When choosing flood insurance, as with any other kind of insurance, it's important to look around for the best quotes. Homeowners insurance rates can change in light of recent events, and checking out different quotes, perhaps online, in order to find the best flood insurance plan for you is always a good idea. Flood insurance costs can also vary between companies.
