Home Owners Insurance•Aayush Raj Arjyal•Ashish Baidya•Chhitiz Shrestha•Sapan Dulal•Satish Khadka

What to get??????What is home owner

insurance?What are home insurance

policies?What are the types of

home insurance policies?What are the coverage of

home insurance policies?Underwriting guidelines?Claim settlement

IntroductionHome Owner Insurance, also commonly called Household

Insurance, is the type of property insurance that covers private homes.

Homeowners insurance is a package policy consisting of different types of coverage for the house, its contents, additional living expenses, personal liability claims against the policyholder and other members of the household, and medical payments to others.

It's a multiple-line insurance, meaning that it includes both property insurance and liability coverage, with an indivisible premium, meaning that a single premium is paid for all risks.

The home insurance policy is usually a term contract—a contract that is in effect for a fixed period of time.

The insured must pay the insurer the premium each term.Most insurers charge a lower premium if it appears less

likely the home will be damaged or destroyed: for example, if the house is situated next to a fire station or is equipped with fire sprinklers and fire alarms; if the house exhibits wind mitigation measures, such as hurricane shutters; or if the house has a security system and has insurer-approved locks installed

Types of homeowner’s policiesHO1 – Basic Form Homeowner Policy .A basic policy form that

provides coverage on a home against 11 listed perils;. The perils include fire or lightning, windstorm or hail, vandalism or malicious mischief, theft, damage from vehicles and aircraft, explosion riot or civil commotion, glass breakage, smoke, volcanic eruption, and personal liability. Exceptions include floods, earthquakes.

HO2 – Broad Form Homeowner Policy A more advanced form that provides coverage on a home against 17 listed perils (including all 11 on the HO1). The coverage is usually a "named perils" policy, which lists the events that would be covered.

HO3 – it is Special Form Homeowner Policy .The typical, most comprehensive form used for single-family homes. The policy provides "all risk" coverage on the home with some perils excluded, such as earthquake and flood. Contents are covered on a named peril basis.

Contd..HO4 – Renter's Insurance The "Tenants" form is for renters. It covers

personal property against the same perils as the contents portion of the HO2 or HO3. An HO4 generally also includes liability coverage for personal injury or property damage inflicted on others.

HO5 - Premier Homeowner Policy Covers the same as HO3 plus more. On this policy the contents are covered on an open peril basis, therefore as long as the cause of loss is not specifically excluded in the policy it will be covered for that cause of loss. (can also be achieved by endorsing an HO15 to the HO3)

HO6 – this policy covers your personal items and your condominium's interior when damage or loss occurs because of aircraft, civil disturbance, explosion, falling objects, fire, hail, lightning, smoke, theft, vandalism, vehicle or wind storm.

HO8 – Older Houses. The "Modified Coverage" form is for the owner-occupied older home whose replacement cost far exceeds the property's market value

Coverage Type

Description

Coverage A:Damage to House

Covers damage to the house. The face amount of the policy (for example $100,000) is the most you will receive if your house is totally destroyed

Coverage B:Other Structures

Covers damage to other structures or buildings, such as a detached garage, work shed, or fencing.

Coverage C:Personal Property

Covers damage to, or loss of personal property. Personal property includes household contents and other personal belongings used, owned or worn by you and your family

Coverage D:Additional Living Expense

Covers additional living expenses when incurred. This means that the policy covers the necessary living expenses up to the stated limit, incurred by the insured to continue, as nearly as possible, the normal standard of living when the house cannot be occupied due to a covered loss.

Coverage E:Comprehensive Personal Liability

Covers personal liability. This coverage protects you against claims arising from accidents to others on property that you own or rent. With a few exceptions, such as auto or boating accidents, it is an all purpose liability policy that follows you wherever you go.

Coverage F:Medical Expense

Covers medical expenses. Coverage is limited to an amount per person and per accident for injuries occurring on your premises to persons other than an insured, or elsewhere, if caused by you, a member of your family, or your pets. An important feature of this coverage is that payment is made regardless of legal liability.

UNDERWRITING GUIDELINES1. CLAIMS HISTORY

All companies make underwriting decisions based on claims history.

Some companies will make adverse underwriting decisions based on the number of claims and/or the type of claims filed by the applicant or on the property to be insured.

2. LOCATION OF HOME Insurance companies make adverse

underwriting decisions because the applicant’s home is located near substandard or commercial property or in a neighborhood with high crime and/or declining property values.

3. CONSTRUCTION OF HOME4. AGE OF HOME

Personal Umbrella PoliciesThe personal umbrella policy is

excess liability insurance that provides protection that is over and above that provided by auto, home insurance.

Umbrella liability insurance is designed to give one added liability protection above and beyond the limits on auto and homeowners insurance policies.

People with significant assets need an umbrella liability policy to cover lawsuits that can sometimes amount to millions of dollars.

The umbrella policy also has broad coverage that covers some claims that wouldn't be covered at all by home and auto insurance.

such as personal injury lawsuits arising from false arrest, slander and libel, or rental units that the insured may own.

The personal umbrella policy also pays for the legal defense of lawsuits that is in addition to the policy limit for damages.

So if you are sued and held liable for $1 million, and your legal costs are $200,000, then a policy providing $1 million of coverage will pay the full claim plus the $200,000 for legal costs.

Things to remember before purchasing homeowner policies Shop Around.

Prices vary so it pays to shop around. Ask friends, check the Yellow Pages, refer to consumer guides, insurance agents, the consumer phone line of the state's insurance commissioner's office and the companies for price information.

Raise the deductible.Deductibles are the amount of money the homeowner pays toward a loss before the insurance company starts to pay according to the terms of the policy. Deductibles on homeowners policies typically start at $250. By increasing the deductible to $500, $1,000, $2,500, or $5,000, discounts may be obtained, depending on the insurance company.

Buy home and auto policies from the same insurer.Some companies that sell homeowners and auto coverage may reduce their premium if two or more policies are purchased from them.

Insure the house, not the land.The land under the house isn't at risk from theft, windstorm, fire and other perils covered in a homeowners policy. Therefore, the value of the land should not be included in deciding how much homeowners insurance to buy.

Beef up home security.Some insurance companies offer discounts for smoke detectors, burglar and fire alarm systems, or dead-bolt locks. Others offer discounts for homes equipped with a sprinkler system and fire detection and burglar alarms that ring at the police station or at a monitoring facility. Before buying such a system, consumers should check with their insurers to validate that such as system will be eligible for a discount and how much the device or system would cost. Most importantly, the consumer should know how much may be saved on premiums.

Seek out discounts for seniors.Retired people stay at home more and spot fires sooner than working people. Retirees also have more time to maintain their homes. If a homeowner is at least 55 years old and retired, he or she may qualify for a discount at some companies.

Some points to remember for home insurance policyWhen applying for home insurance, make sure you carry along your

detailed information such as marital status, occupation and employment history, criminal history, credit and insurance history, etc.

The insurer will also take a look into the home insurance claims you’ve made in the past.

The factors to determine your premium are also based on the age of the house, the square footage of the property, the location, the number of rooms, and the materials used to build your home.

The insurer also looks at the overall condition of your home and the number of people residing in it when determining the premium for your home insurance

Homeowner’s claims settlement Report loss or damage to your insurance agent

or company as soon as possible. Take precautions if the damages require you to

leave your home: Secure your property, and lock all windows and doors.

Survey the damages and take photos or videos of damaged areas, if possible, and make them available to your insurance company.

Study and know your policy limits and coverages. If you do not understand your coverage, ask your insurance agent or company representative to explain.

Beware of fly-by-night contractors. Get more than one bid, and hire a local, reputable contractor to do the repair work.

Make sure a written agreement between you and your insurance company has been signed before starting repairs.

An insurance company has 30 days to complete an investigation of your claim. If the company isn’t finished in 30 days, it must provide a reasonable explanation.

There are no provisions requiring a company to pay your claim within a certain amount of time.

Thank You