Homeowners Insurance - 3 Levels of Protection
All homeowners insurance policies are not alike. They pay varying amounts of coverage to replace your home and personal belongings.

The 3 most common levels of coverage are:

• Actual Cash Value
• Extended Replacement Cost
• Guaranteed Replacement

Actual Cash Value
Your house or property is covered for the depreciated amount of the replacement value at the time of loss.

Extended Replacement Cost
Your house or property is covered up to a specified amount or cap. For example, assume the dwelling coverage in a policy is $100,000 and it has a $150,000 cap. If there were a fire and it was determined at the time of loss that the home needed to be rebuilt, then extended replacement cost coverage might pay up to $150,000 of rebuilding costs.

Guaranteed Replacement
There's no cap or maximum pay-out amount on guaranteed replacement coverage. For example, assume a home was originally worth $100,000. But over the years, the owner makes unique design, decorating and style changes that make the home worth $250,000. If the home was destroyed in a fire guaranteed replacement coverage would enable the owner to restore the home to its $250,000 condition. This type of coverage may cost more, but it provides the most protection.

We also recommend inflation protection This clause or endorsement annually adjusts your homeowners insurance policy to account for increases in rebuilding costs, as determined by the industry's inflation statistics, if there were a loss.

 
 
How much insurance do you really need?

If your home and belongings are damaged or destroyed, you don't want to be under-insured You don't want to pay for insurance you don't need, either.
 

Note: Maintain adequate coverage by reappraising your property often, especially if your home is in Califorina and is subject to earthquake damage. A more recent example is in Florida were home owners didn't increase their insurance coverage as their property appreciated and are now suffering the loss of appreciated value because after the hurricanes, the insurance companies did not recognize the appreciated value. Only the coverage mattered and the appreciation was lost. Lenders often require 125% of value coverages to protect themselfs - you should also.

Flood Insurance
Flood Season is fast approaching! Don't get caught unaware!
Floods can happen even in drought and low snowpack years.

There is a 30 day waiting period for new flood insurance policies to take effect once they are purchased. Floodplain residents should consider buying flood insurance before the start of the flood season (around the beginning of April).

The National Flood Insurance Program (NFIP) is a federally subsidized program that is available to any property owner whether or not the building is in a floodplain. Insurance is sold through a private insurance agent who wants to sell it in a community who has joined the program. The NFIP is based on an agreement between local communities and the federal government which states that if a community will implement measures to reduce future flood risks to new construction or substantial re-construction, the federal government will make flood insurance available within the community as financial protection against flood losses which do occur. It is very important to know that most homeowner’s insurance policies do not cover losses from flooding. The only way to get federally-backed flood coverage is through the NFIP. You can visit FEMA's website at www.fema.gov.

You can also get more information about flood insurance here.

It is interesting to note that about one third of all flood insurance claims come from outside of the mapped regulatory floodplain areas (100-year floodplains). Homeowners may check with their local insurance agent to find out more about flood insurance coverages and costs.

See Title Insurance for other insurance covering your purchase and past ownership faults.

See Mortgaage Insurance for explainations & payment calculations for mortgages exceeding 80% of home value.

• FHA - Mortgage Insurance Premium (MIP)
• Conventional - Private Mortgage Insurance (PMI)
• VA Funding Fee

Also Note that Farm Owners Insurance and Crop Insurance is required for many Farm, Ranch and Agriculture use properties.