Note
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 1,200Source: www.ricedelman.com
But there is more to home insurance than fire insurance
Coverage A: Damage to residenceB: Damage to detached structuresC: Damage, theft of personal property at home or anywhereD: Living costs (e.g., hotel, meals)E: Non-vehicle personal liability for injuries/property damage at home and anywhereF: Medical payments to guests injured on your property
Bottom Line: Insure for 100 percent of the replacement cost of the propertyLong 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 baseball
You spill a drink on the neighbors living room carpet ruining the carpet
General Rule: Set the personal liability on homeowners 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 shiftingWater that enters the house at or below ground level (e.g., sewer backup, flood)War
What is the maximum annual out-of-pocket expenses?Are there any limits on any expenses such as a specific surgery or room charges?Can you see a specialist without a referral?Is the coverage worldwide?
Liability Coverage (injury and property)Medical Payments (for you)Collision and Comprehensive (your vehicle)Uninsured/Under-insured
CoversLawsuits: suability factor is importantpays for your defenselegal judgmentsLost wagesPain and suffering
Medical Expenses
Example 1Example 2Example 3Injury limit per person$50,000$100,000$250,000Injury limit per accident$100,000$300,000$500,000Property damage limit per accident$25,000$50,000$100,000
Who you hit matters!
TeacherPro AthleteLost Wages$50,000$2,000,000Pain and Suffering$150,000$1,000,000Medical Expenses$100,000$100,000Total Claim$300,000$3,100,000
. . . consider buying an Umbrella Policy
Buy a safe vehicle- test crash results www.iihs.orgChoose high collision and compr. deductiblesKeep a clean driving recordMaintain a high credit scoreInsure your car and home with the same companyDont submit small claims on property damageStudy G.P.A of 3.0 or greater
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