Insurance, Divorce and Your Home

To properly protect your home and your car, you need two basic insurance policies:

Homeowner's or renter's insurance, which covers the value of your belongings against physical damage and theft.

Things you should know about Homeowner's Insurance:

What is home insurance?

A home insurance policy is a contract between you and an insurance company. In exchange for your premium payment, the insurance company promises to pay for financial losses caused by a broad range of calamities that could damage your home or your property, if they occur during the period of the contract and subject to the terms and conditions of your policy. The insurance company also promises to pay damages resulting from injuries or damage to other people, for which you are held legally responsible.

What affects your home insurance rates?

The location of your home - A house near a fault line in California costs more to insure than the same home in Idaho. Homes built on sand are also more costly than homes built on bedrock. (It's a safe bet the little pigs that built their houses of straw and twigs would have paid a pretty penny for homeowner's insurance if they had survived that encounter with the wolf.) The year it was built - Statistically, newer homes are less susceptible to fire and other hazards, and are therefore less costly to insure. Closeness to a fire station and fire hydrants - The greater the chances of putting out a fire once it starts, the lower your premiums will be.

What can you do to reduce them?

Get a smoke detector - It's the law in most states, and a few extra smoke detectors will help to lower your premiums - - so will fire extinguishers.
Lock up - Deadbolt locks will increase your security and reduce your rates.
Make those improvements - Home improvements to older homes will reduce the likelihood of a loss, and therefore cut your premiums. Replacing the roof, upgrading the pipes, and rewiring the house will help reduce your insurance rates.

Some items require special coverage

Homeowner's/renter's policies typically provide only limited coverage for specific items of value like jewelry and works of art. If you own items whose value exceeds the standard dollar limits of coverage in your policy, you may want to consider buying extra coverage in the form of an insurance floater. Here's the maximum amount of insurance (insurers call it 'the limit of indemnification') most insurers stipulate for specific items in a standard homeowner's policy:

Item

Money, bank notes, bullion, coins and metals
Securities, manuscripts, stamp collections, and valuable papers
Water craft including their trailers, equipment and motors
Trailers
Grave markers
Property on the residence premises used for business purposes
Property away from the resident premises used for business purposes
Loss of jewelry, watches, fur, and precious and semiprecious stones by theft
Loss of firearms by theft
Loss of silverware, silverplateware, goldware, goldplateware, and pewter by theft
Limit of Indemnification

$ 200
$1,000
$1,000
$1,000
$1,000
$2,500
$ 250
$1,000
$2,000
$2,500



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