Homeowners Insurance Policies
At FamilyEducation, you will know what insurance policy the homeowner should have.You see most insurance companies’ offer six basic types of homeowner’s policies. They are known in the industry as HO-1 through HO-6, and they cover a variety of different perils, or potential dangers. Some of the perils covered under the six basic policies are fire, damage caused by falling objects, an explosion in your heater or air conditioner, riots, vandalism, and hurricanes. There are also expanded versions of these policies, such as HO-3000, and they're all based on various coverages that different people need.
The part of your homeowners insurance that covers your house (the structure, that is) is called dwelling coverage. Dwelling coverage isn't based on how much you paid for your house or how much money you borrowed to buy it. It's based on how much it would cost you to rebuild your house if it were completely destroyed.
If you have a guaranteed replacement provision, you won't have to pay for construction, leave your home unfinished, or pitch that tent; the insurance company will pay for the rebuilding, even if it ends up costing more than your policy limits. Most insurers will give you up to a certain amount more than your policy's limits.
You should have a replacement cost provision to cover your personal property, as well. Be aware, however, that the definition of guaranteed replacement cost varies from insurer to insurer.
And, be sure to clarify your guaranteed replacement cost coverage with your insurer.
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