What is the largest asset that you own and on which you make the largest payments?  It is your home, of course.  That is primarily the reason for the insurance on your property.  If you are like other citizens, you could not possibly recover from a devastating event like a fire or flood.  So, insurance is there for you to use just in case.

At the core the concept of insurance is risk taking. In a community of thousands of homes, pooled insurance premiums help offset the loss of one or two homes from a given calamity.  And the same is true nation-wide.  It is during times like horrible hurricanes and other major devastating weather events that we hear of insurance companies taking large losses and possible going out of business.  But, that is their business, and on the whole, it works out very well for them from a profitability standpoint.

Property and casualty are actually two separate things, but they are mainly combined to give the best coverage from catastrophic loss.  Generally, you will see these types of occurrences covered: fire, wind storms or hail, lightning, volcanic eruptions, explosions, air plane or automobile crashes into your structure, and even damages from riots and civil unrest.

The common homeowners policy covers things like theft, lawsuits, and even living expenses for having to live outside of your home during a disaster.  Also, there are other items that can be covered as well, such as outbuildings on your property, personal property contained in the home, and even trees and shrubs.

You might even be interested in the following add-ons or ‘riders’ as they are called:

Flood insurance. You will have to have flood insurance if your house is in a flood zone as stipulated by the Federal Emergency Management Agency (FEMA).  Flood insurance will cover the loss of your house structure, but may only provide for a prorated amount on the contents that are damaged as a result of flood waters entering your home.

Earthquake insurance. Most insurance companies provide coverage for earthquakes, but keep in mind that deductibles in earthquake-prone locations are very high and can range from 10% to 15% of the value of your house.
Additional insurance for valuables.  If you have valuables in your house, they are not generally covered under the contents portion of your homeowners policy.  You will have to obtain add-ons for things like jewelry, antiques, works of art and rare collectibles as well as classic automobiles.

Insurance is there to cover you so that you do not have to take a financial loss because of an incident that can leave you in worse shape than before.  Protecting what you own is smart and while the insurance may not be able to bring back everything exactly as it was before, you can recover so that you can move ahead with your life.

Tags: casualty insurance, homeowners insurance, property insurance

This entry was posted on Thursday, April 16th, 2009 at 8:16 am and is filed under tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

• Designing your Country Garden Landscape Design is an element of planning your country garden just like it is an element of any art. You are going to want your country garden to look lovely both to you and to anyone else who visits. So are...
• 5 Ways to Lower Your Home Insurance Premiums Right Now Homeowner’s insurance is necessary to protect you should your home ever suffer damage from fire, theft, or other costly incidents. This type of insurance will also protect you if you are found to be liable for injuries suffered by somebody...
• What Is VoIP? Many have heard of the VoIP phone service, but are unsure what the term VoIP stand for. VoIP stands for Voice Over Internet Protocol. Great, but what does that mean and how does it affect me? I can hear you...
• Should You Sell Your House in This Market? During the process of hunting for our first house, I got to thinking about the difficult position many Americans are in with the declining value of their homes.  In ways, it seems to be a great time to purchase a...
• Benefits of Home Warranty Policies Homeowners typically want to protect all that they own and this usually means purchasing an insurance policy for their home and valuables. However, this will not provide any assistance if something just stops working or if something in the home...