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home insurance coverage characteristics
In order to understand home insurance coverage characteristics and pricing it helps to have an overview of home insurance coverage in the widest sense. Homeowners is typically sold as a package of coverage types, as a multi-line insurance product. The chart below illustrates how the word 'coverage' is often used interchangeably to refer to what are three distinct aspects of your home insurance protection:
Coverage Forms = Products = Differ by Perils & Settlement
Coverage Areas = Types Of Coverage(s) = Homeowners Package
Cover(age) Perils = Cover For and Against? = A. B. & C.
What you ARE and ARE NOT covered against by default:
Endorsements = Extra Additional Cover
Home Insurance Coverage Forms
Forms are the name given to the different products that exist in the market. Products are denoted by Ho, with the Ho3 Form being by far the most popular product sold and agent recommended home insurance coverage form. These products are designed for owner occupiers, people wishing to insure property as their primary residence.
Holding some form of product is required by mortgage lenders in order to satisfy the banks requirement for hazard insurance in order to protect the loan collateral. Homeowners that fail to buy a policy, or have one cancelled or expire run the risk of having a Force Placed policy imposed by the bank, the cost of which is added to the mortgage.
- Product Forms differ by Perils and Settlement
The popular Ho3 product provides a solid basis of protection that can be enhanced through purchase of policy endorsements. Also known as 'Insurance Riders', endorsements are a way to build upon the default product offering in terms of home insurance cover or perils and settlement in addition to extra protection.
Home Insurance Coverage Areas
Areas refers to the aspects of insurance protection or home insurance coverage types within the typical product. Recall, home insurance comes as a package or collection of separate coverages each serving their own purpose and subject to their own terms. Although when you buy home insurance you pay a single premium or receive a single price quote, the premium and quote is inclusive of all the separate coverage types.
- Coverage types make up the Homeowners Package
Homeowner policies go far beyond the basic requirement of the mortgage lender for hazard insurance, offering protection in key areas of importance to homeowners for a quote that is typically less than an inferior force placed product. In addition to protection for your home and personal property (aka contents), you enjoy further coverage including valuable personal liability insurance. Collectively, these home insurance coverages are referred to as the homeowners package.
Home Insurance Coverage Perils
What are you covered against? Home insurance coverage is often used to mean the things, events, occurrences or circumstances that are covered by insurance. Known as perils, it is essential to familiarize yourself both with what IS and what IS NOT covered as standard or by default.
- Perils are what your Home and Personal Property is Covered For and Against
Some perils may be brought under coverage by means of an endorsement; however many things cannot be insured against through a standard homeowners product of any form. Follow the link above to our Perils List Chart, which summarizes what is included and excluded by default according to your choice of product form.
Best Home Coverage
Find carriers here online and discover the best coverage and quotes in your area. The popular Ho3 product accounts for the bulk of policies sold and offers solid protection for an affordable price. Follow our articles on the special and premier forms to learn why Ho3 is the home insurance coverage form of choice. While special form coverage may afford the best policy buy, what about pricing and carrier quality? Whatever product you buy, price quotes are based upon rates that insurers set for a home at your location requiring a given policy limit. There are no set or standard prices, rather quotes are unique to the policyholder and take into account many facts in regard to the specific property and insured. The competitiveness of the underlying rate used by any carrier in calculating your quote is however an important determinant of overall price quote competitiveness. Premium quotes may vary by hundreds of dollars on account of the rate used and hence choice of insurer. Shopping home insurance quotes online is a way that consumers may identify value since there is no one cheapest company or universally applicable list of cheap companies. In addition to price quotes, shoppers may consider quality as relates to the insurance company itself. Customer service and services, such as online claims submission and monitoring in addition to performance in the claim handling process are important metrics that may inform choice. The best home insurance coverage is the right product from the right provider for an acceptable mix of price and quality. Find carriers and get free quotes today.