Homeowner's Insurance

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Information in this presentation is derived from
Insurance for Dummies by Jack Hungelmann.

I highly recommend this book.
Odds of a house burning down: 1 in 1,200

But there is more to home insurance than fire
Coverage A: Damage to residence
B: Damage to detached structures
C: Damage, theft of personal property at
    home or anywhere
D: Living costs (e.g., hotel, meals)
E: Non-vehicle personal liability for
    injuries/property damage at home
    and anywhere
F: Medical payments to guests injured on
    your property
   Bottom Line: Insure for 100 percent of the
    replacement cost of the property
       Long story short, if you do not at least insure for
        80%, you may not be fully insured in the event of
        partial damage (e.g., kitchen fire).
   Keep in mind, if you pay, say $300,000 for a
    house, that cost includes the land.
   If your house is appreciating each year, you
    may need to increase the insurance
           Very Important Coverage!

Covers liability for injuries and property damage,
   lawsuits, defending lawsuits, covering most
     non-vehicle personal liability worldwide
   You hit the catcher with a baseball bat playing

   You spill a drink on the neighbor’s living room
    carpet ruining the carpet
General Rule: Set the personal liability on
homeowner’s at the same level you set liability
on other policies (e.g., auto)

Rationale: nobody knows where a law suit or
injury may come from
   Earthquakes, tremors, landslides, sinking or
   Water that enters the house at or below ground
    level (e.g., sewer backup, flood)
   War
   Dollar Maximum Per Claim: Maximum the
    insurance company will spend for any single
    injury or illness

   Dollar Maximum per lifetime: Maximum the
    insurance company will pay out over your
Some policies have limits policy such as

$200 a day for room and board

$4,000 for XYZ surgery
1.   What is the maximum coverage limit?
2.   What is the maximum annual out-of-pocket
3.   Are there any limits on any expenses such as a
     specific surgery or room charges?
4.   Can you see a specialist without a referral?
5.   Is the coverage worldwide?
1.   Liability Coverage (injury and property)
2.   Medical Payments (for you)
3.   Collision and Comprehensive (your vehicle)
4.   Uninsured/Under-insured
1. Lawsuits: suability factor is important
        pays for your defense
        legal judgments
        Lost wages
        Pain and suffering

2.   Medical Expenses
                     Example 1   Example 2   Example 3
Injury limit per     $50,000     $100,000    $250,000
Injury limit per     $100,000    $300,000    $500,000
Property damage      $25,000     $50,000     $100,000
limit per accident
Who you hit
                 Teacher    Pro Athlete
Lost Wages       $50,000    $2,000,000
Pain and         $150,000   $1,000,000
Medical Expenses $100,000   $100,000
Total Claim      $300,000   $3,100,000
. . . consider buying an Umbrella Policy
   Buy a safe vehicle- test crash results
   Choose high collision and compr. deductibles
   Keep a clean driving record
   Maintain a high credit score
   Insure your car and home with the same
   Don’t submit small claims on property damage
   Study– G.P.A of 3.0 or greater