Financial Education Program on Insurance
Presented by: ASPIRA
Homeowners Insurance
Presented by: ASPIRA
RISK: WHAT IS IT?
Risk = the possibility of financial loss
Why is risk important for insurance?
Risk is what makes you decide whether or not
you need insurance.
Risk is what insurance companies measure when
determining whether to offer you insurance and
how much it will cost.
Risk Factors for Homeowners Insurance
Type of home (single family, Personal property (including
town home, high-rise) furniture, electronics, high value
Square footage items, etc.)
Number of rooms Special safety features (security,
Floor level (if in high-rise) alarms, sprinklers)
Address (city, state, county) Credit rating of policyholder
Pets Prior insurance history (claims
filed, etc.)
Pool
Construction type (brick, frame,
Proximity to fire station and etc.)
fire hydrant
Roof type (shingle, tile, metal, flat,
Business being conducted on etc)
premises?
**Amount of coverage required**
What is insurance?
Insurance is a legal contract that
transfers risk from a policyholder to
an insurance provider
WHY DO I NEED HOMEOWNERS
INSURANCE?
Your home is likely to be the biggest investment
you will ever make. Losing this asset would cause
a financial disaster if you don’t protect it with
insurance.
The Components of Basic
Homeowners Insurance
What does basic homeowners
insurance cover?
• Dwelling – Coverage that protects the
structure of the home (roof, walls, wall-to-wall
carpeting, etc.).
• Other structures – Coverage for sheds,
detached garages and other structures not
connected to the main dwelling itself.
What does basic homeowners insurance
cover? cont.
• Personal Property – Coverage for personal items
(clothing, furniture, appliances, computers, etc.).
Provides coverage on and off the premises.
• Loss of Use – Coverage for when an insured has to
move out of the home while repairs are made as a
result of damage caused by a covered loss.
What does basic homeowners
insurance cover? cont.
• Liability Insurance – Pays for damages the
insured is legally obligated to pay due to bodily
injury or property damage.
• Medical Payments – Pays for medical and/or
funeral expenses incurred by a person on or off
the insured’s property.
What does basic homeowners
insurance cover? cont.
Most homeowners insurance contracts
normally include coverage for the
following items, but this can vary by
company and state. Check your policy to
be sure what is and what is not covered.
• Trees, shrubs, plants and lawns – Coverage is
provided to these items if damaged by a covered loss.
• Debris removal – Coverage for removing the
remains or rubbish of any property destroyed as a
result of a covered loss.
• Fire Department Charges – Provides coverage for
customary fire department charges under contract or
agreement. May be subject to limits depending on
your policy.
Perils Covered by Homeowners Insurance
• Fire and lightning •Theft
• Windstorm and hail • Falling objects
• Explosion • Weight of ice and snow
• Riot and civil • Glass breakage
commotion • Accidental overflow of
• Impact from aircraft water from plumbing
• Impact from vehicles • Accidental electrical
damage to appliances
• Smoke (caused by power surge)
• Vandalism and
malicious mischief
Perils NOT Covered by Standard
Homeowners Insurance
(You may need purchase a separate policy!!)
• Flood
• Hurricane or windstorm
• Earthquake
• Acts of terrorism or war
ADDITIONAL COVERAGES*
• Jewelry, watches, furs • Money, coins, securities,
• Guns deeds
• Tools • Watercraft, trailers,
• Cameras, camcorders equipment, motors
• Silver, gold, pewter • Computers
• Business property
* Coverage for these items is already included in the
homeowners insurance policy up to certain limits. For an
additional premium, you can increase the limits of these
coverages to meet your needs.
LIABILITY COVERAGE
• Protects your family and anyone under age 21 in
your care
• Protects you against legal claims you are legally
obligated to pay for causing bodily injury,
sickness, disease or death of others
• Pays the cost of defending a claim against your
• Covers damage to the property of others
GUEST MEDICAL PAYMENTS
• Covers first aid expenses of others
• Provides for accidental death benefits
Protecting Your Personal
Property:
Two Options for
Homeowners Insurance
# 1: Actual Cash Value
Definition: The value of the property lost or damaged
at the time of the loss. This method of valuation
takes into consideration depreciation based on such
factors as:
• Age of the item
• Market value
• Condition of the property at the time of loss
or damage.
#2: Replacement Cost
Definition: The cost of replacing damaged or destroyed
property without deduction for depreciation in the
value of the property.
STEPS TO PROTECTING YOUR
PROPERTY
1) Take an 2) Compare
inventory quotes
3) Select your
coverage
6) Select a Next Steps
provider and
apply
4) Ask about
5) Check for disaster coverage
discounts in your area
Practice Shopping for a Policy
http://www.nationwide.com