What kind of homeowner's insurance should I carry?

You lender requires you to carry a homeowner's insurance policy (also "hazard insurance"), protecting your home (and the lender's money) against such hazards as fire, smoke, wind, hail, explosion, riot theft, glass breakage (if the glass is part f the home), and damage caused by aircraft, vehicles and vandalism. A basic policy also protects you against injury to a visitor on your property.

As "all-risk" policy reimburses you for the major hazards plus damage due to lesser catastrophes such as burst water pipes. But, to insure all you equity and personal property, you may still need additional coverage.

A "guaranteed replacement cost" policy covers your home and contents for the full replacement value, rather that the actual cash value (the replacement cost minus depreciation).

Consider a policy with an "inflation guard" to adjust the amount of coverage based on the inflation rate.

<< Back <<