If you are purchasing a home through a mortgage loan the source of your loan, known as the originator, is almost certain to require that you take out homeowners insurance to a sufficient degree to at least make it certain that in the event of damage or destruction you will be able to pay off the mortgage.

In the current financial circumstances it is easy to understand the concern any loan source would have regarding a loan that is no longer backed by the original property. There are a few instances in which the originator will waive the need for homeowners insurance, but usually only when the underlying lot/acreage is precious enough to offset the value of the loan. As in most instances, a building is worth more than the land it is built on, this circumstance seldom applies.

A plan should, usually, cover the cost of replacement of the building. This is not the same value as the actual value of the building. Replacement usually costs less than the market price of the building: a preexisting property is valued and sold at its market worth, which takes into account the additional costs of materials, labor and time to rebuild.

If you are comfortable restricting your insurance to a simple value that is possible, but will require specific modifications of the contract. The same applies if you want to use the oldest form of insurance, covering specific risks rather than the more commonly used broad coverage that deals with most events.

Once you have decided on the basic plan, you must consider auxiliary aspects you want covered. If there are outbuildings — sheds, barns, workshops, detached garages, boathouses and the like — you will need to arrange for their coverage also. If you want the contents of property covered that, too will need to be factored in.

Further insurance can be allocated to cover the cost of renting a residence during the time you are deprived of the use of your own property, and to insure the income you might otherwise have made if you were renting some portion of your property out.

These issues are of vital importance. If your house is of modest worth, but you own a Stradivarius violin, and the house burns down, the loss of the home may be of completely secondary importance compared to the value of the instrument.

Having determined the value of your property and the cost of replacement, you need to examine the contract to determine what exclusions the insurance company is trying to claim, and what remedies you can take if you are uncomfortable with those exclusions.

Standard exclusions address various natural problems like the earth or foundations shifting, or problems caused by neglect. In some instances excluded subjects can be addressed through secondary policies, as in the case of earthquake insurance in California. Also, be aware of the fact that no homeowners insurance policy will cover flood damage. To get flood insurance you need to get government flood insurance.

When you have factored all these issues in, gotten quotes, and compared policies, you will be in a position to determine what, for you, is the right amount of homeowners insurance.

Use the form below to get a free home insurance quotes.

The forms for homeowner’s insurance policies are standardized to insure consistency and ease of use.  These forms are provided by the Insurance Services Office or the ISO.  The various types of policies that are available are referred to in letter/number combinations, with HO being the letters and the numbers running from 1 thru 8.

HO-3 is the most common policy type and is sometimes referred to as “all risk” or “open perils”.  It and other policies of this nature cover damage to the property, the dwelling, the occupants and their possessions in case of certain events.  

The events that are covered and the amount of coverage must be outlined in the policy.  HO-5 is a similar policy, but covers a wider breadth of incidents.

Some of the events that are generally covered in basic home insurance policies include damage due to lightning or theft. Some of the events that are typically not covered include floods and earthquakes. Special insurance must be purchased if you live in a flood or earthquake prone area.

Fire insurance is added to most policies, but the home must be equipped with smoke detectors and fire extinguishers to qualify.

Common possessions are covered by standard policies, but in some cases an individual may need a special rider (an HO-1) to cover a particularly valuable item.  A valuable painting, for example, might need a separate rider.  

Specific “portions” of a home might require additional coverage.  For example, an indoor swimming pool might only be covered by an HO-2 rider.

Renters insurance (HO-4) is a type of coverage that is purchased to cover items within a home or apartment rather than the building itself.  Usually, the owner of the property has insurance that covers the structure, but the policy cannot be extended to cover items owned by the renter.

An HO-6 policy was created specifically for condominium owners.  Certain parts of the structures are covered by the Association’s insurance.  An HO-6 fills in the gaps.  The last policy type, HO-8, was created for people that own older or heritage homes.

It is important to consider all of your options when you are purchasing homeowners insurance and to be familiar with what your policy covers. Most companies now provide quotes on line, so that you can easily compare your options.

See how little you could be paying by getting a free home insurance quote below:

Nevertheless, many people rightly feel that we as taxpayers should not have to be on the hook for poor business choices made by financial institutions. However, I am not going to discuss who is to blame or even how to fix the problem (I will leave that to people more qualified than I am), but instead I will give you a few ideas on how you should look at your personal insurance options given the current climate of economic uncertainty.

To do this I will look at four different types of insurance that you may or may not have. These will be auto, health, life and home insurance. There are ways you can structure your insurance policies that can save you money while maintaining the coverage you need.

Auto Insurance

If you drive there is no way you can get around having coverage for your car. That being said there are ways you can reduce your auto insurance premiums. The easiest way to do so is to get a free quote (see the left hand sidebar of this page). Beyond that I have previously outlined 11 insanely easy ways to reduce your auto insurance premiums by 40%. Hopefully you can find some new ideas to help save you even more money.

Health Insurance

Losing your job can have a double blow on your finances if you also lose your health coverage at the same time. Obviously, you will want to find a new job as soon as possible but until you do, you may need to consider paying for your own health coverage.

Many people consider health insurance as optional at least for the short term. However, you never know when an accident or disease may strike, so it is a good idea to stay covered at all times. You can find out which companies are offering good deals on individual health insurance coverage in your state just by using the free quote option on the left hand sidebar.

Life Insurance

This is another type of coverage that many people consider optional, and in certain cases I think it is. If you don’t have any dependents (e.g. kids or a spouse who does not work) then you really don’t need any coverage beyond your funeral costs. This is especially true of things such as children’s life insurance which is totally unnecessary for 99.9% of all families.

Another important thing to consider when thinking about life insurance is whether to opt for term or whole life coverage. With the current market conditions it may seem tempting to build cash value with a whole life plan but I still think term life makes more sense. If you are not sure, you can always get a mix of both coverage types to hedge your bets no matter what the future throws at you. You can find great deals on life insurance coverage by getting a free quote on the left hand sidebar.

Home Insurance

If you have a mortgage you probably already have homeowners insurance, since most lenders will require you to have it. You need to make sure you have enough of it and that you are paying as little for it as possible. Essentially, you want to make sure you have enough coverage to cover the costs of rebuilding your home should the unthinkable happen. You can do this by getting a few contractors to give you quotes on what they think it would cost to rebuild. It may be less than you think, due to the oversupply of builders left over in many areas due to the housing crisis.

The reason why you don’t need to cover the full cost of your home is that we are assuming that the land your house is built on still has some value as well. To pay as little as possible for that coverage you can simply get a free quote from the left hand sidebar.

So there you have it, a few simple ideas on how you can maintain all the coverage you need at prices you can afford. I expect to see increasing competition over the next year in the consumer side of the insurance industry. This means you should get a free quote for each of your insurance products every 6-12 months to make sure you are continuing to pay as little as possible. To see if you paying as little as possible right now, just select one or more of the free quote options listed to the left of the screen.

Hopefully, Hurricane Gustav will not cause any damage or at the least far less than Katrina did. However, the problem with Hurricanes and other natural disasters is that you can never be entirely sure when and where they are going to hit.

This is what makes having proper home insurance so important. Now, if you live in the likely path of Hurricane Gustav it is probably too late to buy a policy that will kick-in, in time. I can only hope that your loved ones and your property remain safe and unharmed.

On the other hand, if you live in an area far removed from Gustav don’t think you are home free. There are many possible disasters that could befall you as well. From fires to tornadoes to blizzards (OK maybe not in August) and more. The point is you should always be protected, no matter where in the country you live.

The easiest and cheapest way to do this is to get a free home insurance quote, which you can do easily just by using the form below:

You will be able to find the best deals from homeowner protection in your home state. Finally, as a reminder that is timely given Hurricane Gustave; home insurance policies in the United States generally do not include flood insurance. This usually has to be bought separately from the Federal Government. So if you do live in a flood prone area make sure to get this protection as well.

In the mean time lets just hope that Gustav does not cause anything like the damage and destruction that Katrina did.

Our overall aim is to help you to stay informed about the world of insurance. To this end we are planning on writing articles about how to save money on insurance, new insurance products or services you may be interested in, as well as general industry news and updates.

To help get you started please feel free to read and use some of our existing services to help you save money instantly. Currently, we provide free no obligation quotes for 4 different types of insurance.

The most common type of insurance policy people have is one for their cars, since it is mandatory to do so. To help you save money, you can either visit our page on free auto insurance quotes online or just use the form on the left hand menu.

Another important type of insurance people need is life insurance. This can protect your loved ones should something happen to you. However, to make sure you are not paying too much please visit our page on free online life insurance quotes or use the form on the left of the screen.

If you own a house you are usually required to have homeowners insurance. To find out how you can save on this type of coverage please read our article on how to get free home insurance quotes online or use the form on the left to get multiple free quotes.

Finally, if your employer does not offer health insurance or does not offer enough coverage you will want to find out how to get some for as little as possible. To help you you can read our page on how to get free health insurance quotes online or use the bottom left hand form.

Have a great day.