Insurance
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Q: |
What kind of
home insurance should I get? |
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A: |
A standard
homeowners policy protects against fire, lightning,
wind, storms, hail, explosions, riots, aircraft wrecks,
vehicle crashes, smoke, vandalism, theft, breaking
glass, falling objects, weight of snow or sleet,
collapsing buildings, freezing of plumbing fixtures,
electrical damage and water damage from plumbing,
heating or air conditioning systems, according to the
Insurance Information Institute, a Washington,
D.C.-based nonprofit group for the insurance industry.
Such policies are "all-risk" policies, which cover
everything except earthquakes, floods, war and nuclear
accidents.
A basic policy can be expanded to include additional
coverage, such as for floods and earthquakes and even
workers' compensation for servants or contractors.
Home-based business-coverage, an increasingly popular
rider, does not cover liability associated with the
business.
Insurance experts recommend that homeowners obtain
insurance equal to the full replacement value of the
home. On a 2,000-square-foot home,for example, if the
replacement cost is $80 per square foot, the house
should be insured for at least $160,000.
For personal items, homeowners can increase their
coverage beyond the depreciated value of items such as
televisions or furniture by purchasing a
"replacement-cost endorsement" on personal property.
Some experts recommend an inflation rider, which
increases coverage as the home increases in value.
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