Still paying mortgage on your home? You may want to consider having a Mortgage Life Insurance as a protection in case of death or permanent disability of the mortgagor. Another one is the Private Mortgage Insurance (PMI) to protect the lender in case the mortgagor defaults in his payments. This allows you to invest in a home with a lower down payment. Lenders generally require a PMI as a condition of obtaining a mortgage. For homeowners, the Homeowners Protection Act of 1998 has required the cancellation of PMI when the loan balance reaches a particular level. The government equivalent of a PMI is called a Mortgage Insurance Premium.

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There are simple steps to take and simple mistakes to avoid costly insurance cost and to avoid a decrease in insurance claims.

- compare insurance quotes. Make sure you have at least five quotes to compare to get the best insurance that will fit your needs. Having more options increases your chances of getting a cheaper offer.

- If it’s available, get a group insurance policy if you belong to an association, or your employer provides such option. More quotes plus more potential clients will most likely result to a cheaper premium.

- Fire safe homes will have cheaper rates as it will have a lesser probability of an event that will result to an insurance claim.

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To know how much value your home and your possessions costs, it is very useful if you make a list as you go around your house. Visit every room, upstairs and downstairs, cupboards, utility rooms, garage and outbuildings. Record every item you may have. Find out what it would cost to replace each item. If you buy any new things especially if they are expensive, check whether they are included in the policy or added as specified items. Keep your receipts and take pictures as proof that you possess certain items. Finally, store your list at a safe place where you could easily remember and retrieve it.

HO-1 : provides coverage for specific items outlined in the policy.

HO-2 : is also a limited policy that covers specific parts of the house against damages, a list of such damages or “perils” should be provided in the policy.

HO-3 : usually called “all risk” or “open perils” policy, it covers all portions of the home, the structures and items inside. It is also inclusive of liability insurance for accidents that may occur inside the premises. Limits of liability and covered items should be clearly detailed in the policy to ensure proper coverage.

HO-4 : also called the “renters’ insurance” or “renter’s coverage” which covers the tenant’s personal belongings and includes a liability insurance.

HO-5 : this is similar to HO-3 but provides coverage on a wider range of incidents and losses.

HO-6 : also known a s Condominium Coverage, and caters to owners of condominiums, and provides protection for items and incidents not covered by the building’s blanket policy.

HO-8 : also called “older home” insurance where homes with higher replacement cost than the market value are insured at a lower market value rate.

Californians buy the most earthquake insurance, but there are fault lines all over the US that caused insurers to worry. The New Madrid Fault runs through Arkansas, Kentuky, Missouri and Tennessee. The Insurance Information Institute predicts that the region will experience a 6.0 magnitude earthquake in the next 15 years. The eastern part of US may also encounter a major earthquake in the next 20 years.

These safety features help avoid total destruction of a home or building. Putting up a Fortified home will cost a little more than ordinary homes, around 3 to 5 percent above the usual cost of construction. But the add-on is worth it, rather than paying for repair or reconstruction. IBHS ensures that prices of disaster-resistant homes are within reach. There is a variety of construction design, you can choose depending on your budget. It also offers guidelines in choosing other home materials and accessories such as window materials.

Existing homes can be improved using disaster-resistant materials during renovations and re-roofing.

Calamities vary in different states. Check out this map to see whether you are in a tornado path or a hurricane-prone area. Practical tips are available to help you customize your home and give that added protection depending on your location.

Visit www.ibhs.org and check out the Features of Fortified Homes

Contents insurance differs from buildings insurance. Buildings insurance covers the main structure of the house. Contents insurance’s coverage includes your home’s contents and your personal possessions. These include a lot of things like furniture, carpets, appliances, equipment, videos, cameras, cell phones, computers, personal belongings, valuables, clothing, and food. They may ask you to point out items on the policy and you may be asked to add security provisions like alarms and locks if you live in an area where thieves thrive. Insurance policies will also cover your belongings when you’re away from home or you could request this cover separately.

Damages caused by the following are not covered:

- flood
- earthquake or land movement
- war
- nuclear-related events (explosion, leakage)
- “Acts of God” or other natural calamities

Repair and maintenance costs may not be fully covered, only a percentage of the cost will be paid by the insurance company.

Among those covered are damages caused by fire, wind. However, if damage is caused by events that are covered and not covered, and occurred at about the same time (e.g. fire resulted from an earthquake), this may not be covered if an anti-concurrent causation clause is included in the policy.

To know more about what is covered by a homeowner’s insurance, check out Insurance Information Institute.

(Image source: www.americanhomeip.com)

To learn more about liability insurance, check out: Liability Insurance

(Image source: www.liability-insurance-central.com)