Tips on Renting a Vacation Home

Summary

Many travelers head off on vacation each year without giving any thought to their insurance needs. Are you one of them?


Many travelers head off on vacation each year without giving any thought to their insurance needs. Are you one of them? You may think that you've planned your vacation down to the last detail, but there's always something that gets left behind. Don't let it be your insurance.

What if the weather takes your vacation by storm?

A big bad storm can huff and puff and blow the house down, but it's probably not your problem. Similarly, if faulty wiring in the house causes a fire, the owner of your vacation home will need to contact his or her insurer. But in certain circumstances, you could be held responsible for damages, so review your liability coverage before you go.

It needn't be a total loss

You've been saving for months and planning the perfect getaway. But what if the luxurious beachfront home you've rented gets washed away with the tide, right in the middle of your vacation? Your vacation would likely come to an abrupt halt, but it doesn't have to be a total loss. You can purchase trip interruption insurance before you go. It's designed to reimburse you up to the amount you paid for your vacation home. But before buying it (perhaps through the agency that rented you the home), read the policy so you'll know what's covered.

There's no place like home

Homeowners insurance is designed to protect your home and many of the personal items inside. But what if you're staying in another person's home or a rental property--will you still be covered? Most basic homeowners policies will pay up to 10 percent of your policy's limit (e.g., $10,000 on a $100,000 policy) for damage to your personal property that occurs away from home. But if you're traveling for more than two weeks, you should contact your insurer to see if you need any additional coverage.

Protecting the family jewels

If you have any special or high-value items (e.g., jewelry, computer or video equipment) with you, consider adding a special endorsement to your homeowners policy to specifically cover these items. This coverage is important whether you travel or not. You'll see a slight rise in your premium, but it's a small price to pay compared with the cost of replacing that three-carat diamond you wear every day.

Get the Home Insurance Facts

Summary

Buying a home is one of the single largest investments that most people ever make. Homeowners insurance is protection for your home.

Buying a home might be the single largest investment that you'll ever make. Protecting that investment is essential—and that's where homeowners insurance comes in.

What is Home Insurance?
Required by most mortgage lenders, most standard home insurance policies will provide coverage for damage to your home (and many of the items in your home) caused by:

• Theft
• Fire and lightning
• Smoke
• Frozen pipes
• Ice and snow

Home insurance also covers injuries and property damage caused by you, your family (or pets) to other people. This liability coverage for will pay for medical payments to third parties, and legal costs if a lawsuit is brought against you. The insurance will also usually cover any living expenses you incur, if you're unable to live in your house because of a fire or other covered incident.

What's not covered?
Read your home insurance policy to find out exactly what is and is not covered. Typically, most insurers exclude damages caused by an act of war, nuclear accident, flood, earthquake, and terrorism, although you may be able to purchase special policies or endorsements that will cover these events. Also, any damage caused by wear-and-tear isn't covered—this is considered maintenance, and is assumed to be the responsibility of the homeowners themselves.

How much is enough?
Mortgage lenders require that borrowers purchase a minimum amount of home insurance (typically equal to the appraised value or the purchase price of the home). But this is often not the amount of coverage you truly need. Instead, find out how much it would cost to rebuild your home, and consider insuring it for that amount. When you apply for a policy, your agent will help you establish the replacement cost by asking for detailed information about the construction and contents of your new home—and possibly by completing a home inspection.

The liability limits on a standard homeowners policy are typically $100,000, but this may not be enough to protect all of your assets. For an additional charge, you can increase this coverage to $500,000. You may also choose to buy an umbrella policy to add coverage in increments of $1 million. Generally, you would buy the umbrella policy from the same company that insures your cars.

You get what you pay for
Are you willing to pay more to have damaged personal property replaced? If so, consider purchasing replacement cost coverage with your home insurance. When it comes to valuing property, insurers generally use one of two methods. The first, actual cash value, pays you an amount equal to the replacement value of the property, minus depreciation for the years you owned the item. The second, replacement cost, is more expensive, but it pays you the full value of the item today, so that you can replace the old item with a new one.

Most home insurance policies limit coverage for certain high-priced or hard-to-replace items. Additional endorsements or floaters will be necessary to protect items like jewelry, furs, antiques, guns, and other valuables. You may need an appraisal for some items before the company will provide a rate.

How deep are your pockets?
To save money, consider choosing a deductible of $250, $500, or even $1,000. In the event of a loss (e.g., damage from a winter storm), you'll be required to pay this amount out of your own pocket before your home insurance takes over, but in the meantime, this could reduce your homeowners premium.

Sound the alarm
Don't forget to tell your insurer if you have a home security system (e.g., fire, burglar, emergency). Most insurers offer discounts for such safety features. You may also qualify for a lower insurance premium if you live near a fire department or hydrant, own a newer home, own a home built out of fire-resistant materials, or get your auto insurance from the same company.

Shop around
Get quotes from several insurance companies when shopping for home insurance. But remember, the lowest price does not always equal the best deal. Compare the coverage each policy offers, and check with your state's department of insurance to make sure that each company you're evaluating has a good reputation in the industry.

New Homeowner Insurance Basics

Summary

The lowest mortgage rates in more than three decades have fueled America's appetite for home buying and refinancing, driving new home sales to a record level .

The lowest mortgage rates in more than three decades have fueled America's appetite for home buying and refinancing, driving new home sales to a record level . Buying a home can be an intimidating process, especially for first-time homeowners who may feel overwhelmed by the number of decisions they are faced with, including choosing the right insurance coverage to protect their property. Find out what you need to know to protect one of their most important assets.

A home is often a person's largest asset and protecting it properly can be complicated. The unexpected can threaten people's homes or possessions and compromise them financially, making homeowners insurance an important consideration.

Insurance.com developed the following guidelines to ease the process of choosing the right insurance for new homebuyers.

First-time homebuyers may not realize that homeowners insurance covers more than just the structure of a house. It also protects the homeowner and generally anyone named on the policy, including a spouse, resident, household employee, guest or visitor. Most policies offer three kinds of protection:

1. Structures - A homeowners policy protects a person's dwelling for damage due to common threats like fire and smoke, lightning, theft and extreme weather. Unless it is listed among a policy's exclusions, anything that causes loss to a homeowner or his property is covered. To cover the exclusions, homeowners can often pay to add endorsements to their policy, although some exclusions, such as flood damage, may require the purchase of a separate policy.

• Coverage Amounts - When choosing coverage amounts, people should remember they are protecting the entire home, not simply the amount remaining on the mortgage or their equity in the building.

2. Personal Property - Family possessions and personal property also are covered by homeowners insurance. In most cases, a policyholder will be reimbursed for damage or theft of personal property, whether the loss occurs on the protected premises or elsewhere. Recalling each item in every room can be difficult, however, so policyholders are encouraged to make an inventory of their belongings - recording the serial numbers, as well as the dates and costs of purchases for possessions such as jewelry, artwork, furniture and appliances. Personal inventories should always be stored in a fireproof safe or away from the premises, such as on videotape or a computer that is not in the house.

• Coverage Amounts - Typically, the insurer sets the total value of possessions at half of what the home is insured for. But there are limits for certain items and the amount may not be sufficient to cover the replacement of property, so homeowners may want to purchase additional coverage for their possessions. Review of a homeowner's personal inventory is the best way to determine whether his coverage is sufficient.

3. Liability - Homeowners insurance also provides compensation for liability claims and medical expenses, as well as other claims that result from property damage and personal injury suffered by others. This coverage applies whether an accident occurs on the policyholder's property or while away from home.

• Coverage Amounts - The standard amount of liability coverage is $100,000 on a typical homeowners policy. If a homeowner feels that the standard amount may be insufficient, he should consult an insurance professional about the availability of a higher level of coverage.

After establishing a policy, homeowners should periodically review their existing coverage to make sure that it keeps pace with any major purchases or improvements they make to their homes. Securing the right insurance policy at the right price is an important step in the home buying process, so homebuyers should shop around for a policy that best suits their needs and protects their most valuable asset appropriately.

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