Saturday, November 2, 2013
Colorado Homeowners Insurance Policy Basics - Everything You Need to Know About CO Home Insurance
How well do you know the basics of your Colorado homeowners insurance policy? It is important that each person trying to purchase homeowners insurance in the state of Colorado know everything about the basics in the industry. According to the United States Census Bureau there are an estimated 4 million people living in Colorado, and they predict that the population of the state has grown by an incredible 10.5%.With all these people living in the state and the new residents moving to this magnificent place it is imperative that they know the Colorado homeowners insurance policy basics. Below you will find some basic information that will help you understand the Colorado home insurance business a little bit better.Colorado Homeowners Insurance Policy Basics: What Is homeowner's Insurance?For any person out there in the market trying to purchase a CO home insurance policy it is imperative to know what exactly they are purchasing. When we talk about a home insurance policy we are referring to a financial contract between a person and an insurance company. According to the contract, the insurance company simply agrees to pay when a natural disaster or an accident affects your home.It is important to know that there are more types of coverage than just simply the structure of your home as we will see in a little bit. It is also good to highlight that there are many different types of policies at your disposal and that it is up to you to pick the one that covers what you think your best interest is.Colorado Homeowners Insurance Policy Basics: Types of CoverageIt is very important for a person to know the exact types of coverage that a standard policy gives them. Below you will see the four most important types of coverage that can be seen in a regular Colorado home insurance policy with a brief description of each.Structure of your home: This is one of the main things that a Colorado homeowners insurance policy covers simply because it is the main reason why people get the homeowners insurance in the first place. It is important to understand that any damages caused to your home by any of the specific things listen in the policy will make the company liable and they will have to pay for the repairs (after you pay for your deductible of course). One important thing to note about this coverage is for people not to add the value of their land into their coverage because it will bring the price up. Simply add the value of the structure of your home itself and you will be good to go.Possessions: This type of coverage is imperative for people to have when they are looking around for CO homeowner's insurance policies. The reason for this is that if a natural disaster or an accident (such as a fire) strikes, most people won't be concerned with their possessions that are inside the home. After all is said and done not only will you have damage or destruction in your property, but your possessions will be gone as well. Usually companies give a person between 50% and 70% the value of the residence, but it varies. Because of this reason it is imperative that you establish the amount of possessions that you will get with the company itself. Keep in mind that home inventories can be very useful for situations like this.Liability: This is relatively a new coverage in CO home insurance policies. It will simply protect you from being sued by a third party if they get injured in your property. Since most standard home insurance policies have this coverage, when someone gets injured in your property they will not be dealing directly with you. Instead they will file a claim with your insurance company and the home insurance company itself will be in charge of them from that point on. You won't be charged a single penny!Other Expenses: This works in combination with the structure of your home. The reason I say this is because if your home is still habitable after a natural; disaster or accident and there are simple repairs being made this coverage won't be activated. On the other hand, if you cannot live at your residence while construction is being made you will be given money for hotel expenses, food, transportation, etc!Colorado Homeowners Insurance Policy Basics: Types of PoliciesThere are many policies in the Colorado home insurance business, but many of them separate the dwelling and the property parts. There are three types of home insurance policies in the state of Colorado that offer both dwelling and personal property (possessions) coverage in the same policy. Below you will see all three with everything that they cover.HO-1 (Basic): This is the standard Colorado home insurance policy, but it has been discontinued in most states. It will cover damages due to things such as fire, lightning, windstorm, hail, riots, vehicle damage, smoke, vandalism, and theft.HO-2 (Broad): This policy is about the same as the basic one mentioned above, meaning that it covers everything stated under a HO-1 policy. The main differences is that the broad policy will cover falling objects, weight caused by ice or snow, water accidents due to plumbing, and electrical damages.HO-8 (Modified): This is simply the coverage that owners of older homes have. The reason for this is that the policy will reimburse you on damage based on an actual cash value. This means that less depreciation takes place. The coverage given is exactly the same as that of an HO-1 policy.Colorado Homeowners Insurance Policy Basics: Events Not CoveredBecause homeowners insurance is extremely important since it protects the value of your home and your living conditions, a Colorado resident MUST know what kinds of things aren't covered under a regular policy. As you can see from our last section home insurance policies cover many things. However, there are three main things that are not covered by a policy (although you can sometimes add the coverage through riders).Flood: This can be a tricky thing because if you live in a Flood prone zone, then you will more than likely be forced to obtain a rider or a flood policy. However, many people do not have them and to prevent any unpaid damage due to flooding you should get a rider for this kind of disaster.Earthquakes: This is another thing that is not covered by any homeowner's insurance policies. Although you can get it as an addition to your coverage, in earthquake prone states such as California, policies come with extremely high deductibles.Maintenance Damage: Many people actually think that they will be protected from damage due to their lack of maintenance in their homes. Unfortunately for them, a company will never cover for damage such as termites, mold, natural wear and tear, and other pest damage.Now You Know The Colorado Homeowners Insurance Policy BasicsAs you can see from the article, there are many things that you should know about a Colorado homeowners insurance policy before you go out and try to purchase one. Although not everything in the market was mentioned in the article, the most important information about the industry was covered. Whatever you do, just know that now you have the necessary skills to understand the Colorado home insurance industry much better!