0 How Expensive is an H06 Insurance Policy?

How Expensive is an HO6 Insurance Policy?

 

An HO6 insurance policy has many factors that determine the premium charged by the insurance company.  Although premiums will differ between insurance companies, there are similarities in determining the premium charged that you need to be aware of. Knowing how this premium is calculated can help you in choosing a condominium that won't cost you a fortune to insure.

The first factor that the insurance company looks at is location; specifically what state the condo is in.  Premiums are different from state to state depending on many factors such as amount of business the company has there, what claims experience they have, and how close to a fire department it is located.  The fire protection class of the fire department is used in the pricing as well as whether the condo is located in a city or not.

Also important in location is whether the condo is exposed to unusual risks, such as flooding and hurricanes.  Many millions of dollars have been spent repairing hurricane damage, as we have recently seen in New York, and premiums have to reflect this risk.

Another factor that affects how expensive an HO6 insurance policy can be is how much coverage you need and how high a deductible you are comfortable with.  The deductible is the amount of money you pay first in the event of a claim before the insurance kicks in.  The higher the deductible, the lower the premium.  Keep in mind that HO6 insurance, as well as any other type of insurance policy should not be thought of as a way to pay for any smaller claims, so look to getting a higher deductible on the your policy, at least $1000 to save money.

The type of replacement coverage you have also has an effect on the premium charged.  Policies can be purchased by most companies two ways; replacement coverage or actual cash value, also known as ACV.  In a HO6 insurance policy the replacement cost option will pay to replace your home just like it is now without any deduction for depreciation.  The ACV coverage deducts money for claims based on the age of the insured part.  For example, in the event of a total loss of a roof, the ACV policy will deduct so much from the payment of the claim based each year of age of the roof, resulting in a lower payout and more for you to pay.  The replacement cost coverage replaces the roof completely regardless of the age.  Obviously the replacement cost coverage is more expensive than the ACV policy due to paying better when a claim is filed.

Yet another factor the insurance company looks at is your personal claim history; in other words how likely you are to file claims.  As stated before, HO6 insurance is meant to cover large losses.  If you have several small claims of $200 - $500, the insurance company will look unfavorably on your application and price the policy accordingly.

How expensive an HO6 insurance policy is can depend on many factors, so the best idea is to get several quotes before you decide on a particular company.  It can save you money in the long run.

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.