0 HO4 Insurance - What is renters insurance?

Just because you rent a home, it doesn't mean you don't need insurance.  After a lifetime of buying clothes, furniture, and other belongings, a house fire can take everything from you.  Some people think that the landlord has insurance to replace these things in the event of a devastating loss like a house fire, but the dwelling fire policy covering the home will not pay for your loss. 

To take care of your possessions in the event of a loss, you need what is known as HO4 insurance, also called a renter's insurance policy. This policy provides similar coverage as the HO3 insurance policy, or homeowners policy, without the coverage for the building.

The first section of the HO4 insurance policy is called the personal property section.  This provides money to repair or replace your belongings.  This coverage is available in either Actual Cash Value or Replacement valuation.  The ACV pays for the depreciated cost of what you lose, where the replacement policy does just what it says; it pays you money to replace what you lose.

The second section of the HO4 insurance policy is called the Liability Coverage section.  This part provides money to pay legal damages in the event he or she is found liable in a lawsuit. Some may believe they may never get sued, but if you have a visitor that gets hurt while in your residence, it could happen. We have all heard stories about a family pet who decides to bite a person who may be visiting.  If this happens to you, you'll sleep better knowing you have insurance to cover this.

Another part of the liability section of the HO4 insurance policy provides money to pay medical expenses in the event someone gets hurt while at the home you are renting, but decides not to sue.  This part is called Medical Payments to Others and pays reasonable medical costs to someone also hurt at your residence. An example would be a visitor who falls off the porch and breaks an arm.  The Medical Payments to Others clause could provide money to pay their medical expenses up to a purchased limit.

When considering an HO4 insurance policy, first add up what possessions you own and calculate a replacement value.  Use this number for the Personal Property limit. Also decide on whether you want ACV or replacement cost.  The ACV will be less expensive, but you may have to make up some of the cost of replacing your items out of your pocket.

Next, decide on the deductible to buy, which the amount of money you would have to pay first before the insurance policy would pay.  The rule of thumb is the lower the deductible, the higher the premium.

Lastly, as with all insurance, it pays to shop around.  Go to one of the online insurance quoting sites and run some quotes to get a feel for how much premium you are looking at.  Then if you would like, take your quote to a local insurance agent to see if you can get a better price.  Renting a home can be easy, but be prepared.  Get a good HO4 insurance policy take care of those things in life that happen to everyone.

0 How to Read Your Car Policy

One of the largest exposures of financial risk for the average person occurs once they get behind the wheel of their automobile.  Once you pull out on the road, there are millions of drivers out there; some of them may not have the best of training.  You may be the best driver in the world, but it's not you that you need to worry about; it's the teenage texting her boyfriend about their breakup last night, or the woman who didn't have time to put on her makeup this morning because she is running late, or the late night party-goer who had maybe a few too many.  No matter how careful you may be, there is always the potential of an accident.  Let's take a look at your typical auto policy and see how to read what it will do for you before the time comes.

First get your policy out and look to the page marked "Declarations".  This gives a synopsis of the coverages in your policy.  The first thing to look at is the make, model, and year of the vehicles listed to make sure they are correct.  Sometimes insurance companies omit listing one of your cars, or fail to change vehicles on the policy when you buy or trade for a new one. Rule of thumb is: if it's not listed, it's not covered!

Secondly, look to the liability limits listed on the declarations page.  It will either have a single number, like $100,000 combined limit, or 50,000/$100,000 limits.  This tells you how much coverage your policy provides in the event you are sued for an accident.  The liability coverage is not one of the higher priced items on the policy, so it's better to have more than less.

Next, if you have purchased comprehensive and collision coverage for your car, look to the deductibles listed.  Both coverages pay for repairs to your vehicle in the event of loss, but for different reasons.  An easy way to tell the two apart is that the collision pays as the result of a collision; car hits a car, car hits a tree, etc.  Comprehensive pays for everything else, and is sometimes listed as "Other than collision".  The deductible is the portion you pay first to have repairs done to your car.  For example, if the repairs are $2000 and the deductible is $500, the insurance company will pay $1500.

The next coverage to look at is uninsured motorist coverage, which compensates you in the event the other person in the accident is at fault and does not have insurance.  And yes, it happens a lot more than you would think.

Medical payments coverage pays for medical expenses to you, your family, or others in your car in the event of an accident.

Lastly you have the ancillary coverages like towing and rental car reimbursement, which are self-explanatory.

Take the time to read your automobile insurance policy.  After an accident happens is no time for surprises.

0 Term vs. Permanent Life Insurance - Which is Best?

Buying life insurance isn't a project most individuals would say they would like to spend time doing. Besides the expected uncomfortable feelings, making an attempt to make your mind up which sort of policy is at best confusing to the average person. Let's take a glance at the 2 basic sorts of life insurance on the market and how to decide which is best for you.

Permanent life insurance goes by many names and kinds - whole life, universal life, variable life, variable universal life, and burial insurance among others.  All of them have one basic premise; it's a kind of life insurance that will be around as long as you live. These policies are designed to be in effect for the whole of your life for as long as you pay the premiums. The premiums are designed to be level; they are meant not to increase over the term of the policy. They have a savings feature built into them that earns interest, and can be used by accessing it through policy loans or withdrawals.

Permanent life insurance will serve totally different functions for the owner in addition to the life insurance benefit. For instance, it can serve as a "forced savings" for people who find it hard to save money. Over time, the accumulation within the policy will add up to tens of thousands of dollars which can be used for emergencies or family expenses like paying for school. It is commonly used as  life insurance for seniors, supplying funds needed for funeral expenses. It may also be used as a retirement supplement, either by accessing the money in the policy as needed or electing a monthly payment.

Term life insurance is best described as pure and simple death benefit protection; there's no money accumulation inside it.   Term insurance is written to be in effect for a specified amount of time, say ten or twenty years. The client pays for the policy either monthly or annually, and at a predetermined time, the policy expires. This type of insurance is purchased with a premium that will increase annually or one that will stay lever for the entire period.

Term life insurance is best employed in things wherever the necessity for insurance is on a temporary basis. It is best used to guarantee a mortgage or a business loan to be paid off in the event of premature death of the insured.  Because of this temporary coverage, the premium for the term insurance policy will be less than permanent insurance.  It can also be a good choice when cost is an important factor, especially for young couples. 

So the question is, which is best? It depends on the reason you are looking to purchase life insurance. A general rule of thumb to use is to look at how long you would like to keep it. If you're looking to cover a need of five to ten years, term insurance will usually make the most sense. If you're planning to keep it for the long term, look to permanent insurance.

1 H06 Insurance Policy or Condo Master Policy - What's the Difference?

H06 Insurance Policy or Condo Master Policy - What's the Difference?

If you are thinking about buying a condominium, you might have questions about who insures what.  In a typical condominium, there might be many separate housing units owned by separate owners, and dealing with insurance issues can be complicated.  Let's take a look at the insurance policies that are used for condominiums - the H06 insurance policy and the condominium master policy.

A condominium consists of individual family or business unit housed in a common structure.  There are also sidewalks, landscaping, and other elements, called common areas that are for the use of everyone.  The building itself consisting of the roof, exterior side walls, entrances, frame, and the common areas previously mentioned are insured with a condominium master policy, purchased by the condominium homeowners association.

Each homeowner in the condominium is responsible for insuring everything else associated with his or her own unit.  Furniture, fixtures, appliances, floor covering, and any personal possessions should be insured with the H06 insurance policy.  An easy way to think of it is the homeowner is responsible for insuring everything from the studs in the walls in.

With two policies like this, sometimes there can be confusion over which insurance company is responsible for paying claims.  A general rule of thumb is that a loss created by a common element that does damage to an individual unit should be covered by the master policy.  For example, if the roof leaks and causes damage to the ceiling in an individual unit, the master policy should generally pay for the repairs.

Both policies will come with a limit of liability protection in the event of legal damages awarded to someone who sues a condo owner or the association itself.  The condominium master policy usually will have a much higher limit of insurance due to the increased exposure of multiple tenants.  It is not rare to have the master policy have a limit of liability coverage of $5 million plus.

It is a good idea to ask for a copy of the limits of insurance of the master policy, called the declarations page, to know and understand what coverages are in place.  This will enable you to purchase an H06 insurance policy and equip it to provide for any gaps in coverage the master policy may have.

If you are going to purchase a condominium, the mortgage company or bank will ask you for a copy of your H06 insurance policy to prove you have insurance.  They will  need a copy of the declarations page of the condominium master policy also to show that there is adequate coverage for the common areas in the event of a disaster.

Owning a condominium can be convenient and for the most part maintenance free.  Make sure you have the right insurance in place to protect your most valuable asset.

0 Burial Insurance for Seniors - What is it and how much do I need?

One of the more important financial planning decision for seniors will be how to pay for their funeral costs. We all know someone who passed away and left their children scrambling for money to pay the expenses.  With average funeral costs rising each year, leaving this expense to the children is not the best route to go. This is where purchasing burial insurance for seniors makes sense.

Burial insurance for seniors are simply life insurance policies purchased to provide money intended for funeral expenses.  They are usually whole life policies, and can be paid for on a monthly basis.  A whole life insurance policy stays in effect as long as you pay the premium on time, and the premiums are fixed.  This way you know how much the costs will be each month and how it fits in your budget.  The beneficiary of the policy is usually a spouse or one of the children who would be tasked with handling funeral arrangements.

When considering burial insurance for seniors, look to purchase a policy with a minimum of a $10,000 death benefit.  Even if a funeral is expected to cost less, there are usually some expenses that come up where the extra money would be helpful.  Any money not needed would go to the beneficiary for their use.

When deciding on the best life insurance for seniors, look for a company with high ratings from the independent insurance rating companies.  These ratings can be usually found on the website of the insurance company or by going to the websites of a rating company like A.M. Best or Moodys'. It will be listed under the "Financial" tab.

Every insurance company has different rules and guidelines for writing policies, so it is best to shop several companies to get the best price.  Go to an online life insurance quoting website to compare premiums.  They have access to numerous companies and can get comparative quotes quickly for you.

When you apply for one of these policies, the company will collect medical information from you to determine what premium to charge. As we get older, we have more health concerns, and these policies need to be priced accordingly.  Some companies will have a more limited underwriting procedure, but their products tend to be priced a little higher.  Fortunately, burial insurance policies for seniors usually have fewer underwriting requirements and can be issued even if someones health is not perfect.

Funeral costs these days can run upwards from $7,000 to over $10,000.  Purchasing burial insurance for seniors is the most cost effective way to pay for these expenses.  You will be paying these costs with pennies on the dollar and have peace of mind that when the time comes, no one will have to worry about how to pay for the bills.

0 HO3 policy - How much insurance do I need?

Determining how much insurance for your home is an important task.  On one hand, you don't want to pay more than you have to.  On the other, if you have a catastrophic claim, such as your home burning to the ground, you want to make sure you have enough.  Let's take a look at the different coverages available in the HO3 policy and how to figure how much you need.

The first section to look at is called Coverage A on the policy.  This is the coverage that most people will refer to when they look at their policies.  Coverage A gives the limit of insurance paid out on a claim to your home from the standpoint of the building itself.  To determine how much insurance you need, you need to be able to know how much money it would cost to rebuild your home just as it is standing now.  There are several ways to do this, but most companies use what is known as a replacement cost estimator to calculate building material cost and labor.  The agent you are working with can do this for you.

The second number to figure is the replacement cost of your property in the home.  On the HO3 policy this is found in Coverage C.  This includes all movable property such as furniture and clothing.  It is helpful to take a quick inventory of your personal property room by room to figure how much coverage you need.  A good HO3 policy will cover your personal property at 75% of what is written for Coverage A, which is usually sufficient, but it never hurts to make sure.

Next you want to look at the liability coverage on your policy, which will be found under Coverage E on the HO3 policy.  This pays for legal claims against you for covered occurrences.  Most people will use the default minimum of $100,000, but look at what you have to loose in a court case, and you can quickly see that the minimum is usually not sufficient.  The liability coverage of the policy is one of the least expensive parts of the premium, so in this case, it is better to have too much than too little.

Lastly, take a look on the HO3 policy under Coverage F, called Medical Payments.  This part of the HO3 insurance policy pays for medical bills in the event someone gets hurt on your property, such as a neighbor kid breaking an arm.

Take a little time to figure out how much coverage is proper for your home.  It takes some time to get the right HO3 policy, but better to be prepared beforehand than find out later you don't have enough.

0 What To Look For in an H06 Insurance Policy

What To Look For in an H06 Policy

You've made the decision to purchase a condominium, you've looked at numerous properties, you've made an offer that was accepted - congratulations!  Now you go to your mortgage company to get a loan, and they ask you if you have found an H06 policy, or condo policy. How do you make an informed decision about what to buy?  Let's talk about what to look for in a condo policy.

The first thing to do is determine how much coverage you need.  Unlike a homeowners policy, or H03 policy, condominium associations will have a master policy to cover the exterior building and common areas, such as the outside walls and sidewalks.  The H06 policy needs to be written to cover the other areas the new homeowner is actually responsible for such as interior walls, flooring, and built in appliances.  Get a copy of the master policy and see what is included and what you will need to insure.

Second, take an inventory of your movable belongings, called personal property.  Add up the cost of these items and put together an estimate of how expensive it would be to replace them.

Next, determine how much liability coverage you will feel comfortable with.  The liability portion of the H06 policy pays for legal expenses and judgments in the event you are sued for covered losses.  A rule of thumb is to add up the equity in your home, the amount of savings you have, and 5 - 7 years income.  $100,000 is the norm, but in these days of higher and higher damage awards, it is better to have too much than not enough.

Once you have these numbers, it's time to find a reputable insurance company that sells the H06 policy.  First, go to an online quote site and have them compare insurance companies for you.  Keep in mind that the lowest premium is not always the best choice.  Make sure you are working with a financially stable company.  This is found out easily by going to the insurance company's website and getting their financial rating done by a third party source, such as A.M. Best or Moody's. These ratings are shown by the letters A through F, with the A being the best.

If you have a company that you are comfortable with already, now is the time to take those quotes to your local agent and ask for a competitive quote.  Tell him or her that you want an "apples to apples" comparison in order to get the best deal.  In this manner, you know you will have done everything possible to save money.

Getting an H06 policy correctly can take a little time and legwork.  However, it is better to do your homework up front and know you are properly insured than to have a insurance claim and find out too late you did not have enough coverage.