Objectives • Identify the types of insurance coverage and policies available to homeowners and renters • Analyze the factors that influence the amount of coverage and cost of home insurance
Overview- What is it? • Insurance – Protection against possible financial loss. • Provides protection against many risks, property, Illness, and injury • Policy - Contract made between the individual and insurance company. • Premium – A fee for insurance.
Homeowners insurance • Coverage that provides protection for your residence and its associated financial risks, such as damage to personal property and injuries to others • Home, building, or any other structures on the property • Additional living expenses • Personal property • Personal liability and related coverages • Specialized coverages
Key terms • Risk: The chance of loss or injury. (owning property-risk that it will be lost, stolen, damaged, or destroyed). • Peril: Event causing damage to your property (ex. fire, tornado, theft, or vandalism). • Hazard: Anything that increases the likelihood of loss through peril (ex. Defective electrical wiring in a house increase the chance of fire) • Negligence: Failure to take ordinary reasonable care to prevent accidents from happening. (ex. Not shoveling the front steps)
Personal property floater • Additional coverage that covers the damage or loss of a specific item of high value • Ex. Wedding rings
Types of Risk • Risk- The chance of loss or injury • Peril – Anything that may possibly cause a loss. • Hazard – Anything that increases the likelihood of loss through peril. • Negligence- The failure to take ordinary or reasonable care to prevent accidents from happening.
Home and Property Insurance • Homeowners Insurance – Coverage that provides protection for your residence. • Homeowners Policy: (covers the following) • The home, building, any structure on the property • Additional living expenses • Personal Property • Personal Liability and related coverage's • Specialized coverage's
Home and Property Insurance • Additional Living expenses – Covers if you cannot live in your home • Personal Property – Are covered up to a portion of the personal property (55, 70, 75%) • Recommend taking a HH inventory • Personal Property floater – Additional property insurance that covers the damage or loss of a specific item of high value. • Personal Liability Coverage- Protects you if others sue you from injuries they suffered on your property. • Most coverage is $100,000
Home Insurance Cost Factors • Location of the home • High crime, severe weather, and others affect the cost for home insurance. • Type of structure- Brick will usually cost less than wood (more durable). • Price, Coverage amount, policy type • How much you paid for the home; what is your total coverage amount • Your deductible will also affect your price.
Renters insurance • Covers: • Personal property – most important • Additional living expenses • Personal liability • Related coverages • Does not cover the building or other structures • Relatively inexpensive
Am I covered while at college? • Check with your insurer to see if your college student is covered by your policy. • http://www.normal.org/Gov/Fire/InAction/Phoenix.asp
Homework – due Friday • Do your parents have homeowners/renters insurance? • If so, find out what your homeowners insurance will cover while you are away at school. Specifically: • Who is your insurance company • What is covered • Amount of coverage • Does your college offer any protection in the dorms • If not, contact an insurance company to determine your options • Should be typed and at least ½ page.