2torial #0790:
Learn2 Shop for Home Owner's Insurance (continued)

Understand what's covered

Individual insurance companies tend to have their own names for different packages, and sorting through the various labels can get confusing. However, a shopping list can help you pick and choose more easily. Make sure you're covered for the following:

The house's replacement cost. It's a mistake to only insure your home for the outstanding balance on your mortgage (which is all that's required by most lenders). Instead, insure it for 100 percent of its replacement cost.

In a basic policy, you should be covered for damage resulting from vandalism, theft, explosions, riots and civil commotion, collisions by vehicles and aircraft, glass breakage, surges or shorts in electricity (though radio and television tubes are usually not covered), and problems stemming from improperly functioning plumbing, heating, and air conditioning.

Basic coverage should also include fire and smoke damage, even if a fire started on someone else's property and spread to yours.

The land. The land around your house will probably survive fire, wind, theft, snow, and other situations covered in your policy. So to save on your premium, you needn't include its value when deciding how much coverage to buy. An exception would be if the land is a farm, in which case you'll want farmer's insurance. Also, ask about a separate structure provision in your policy, which should cover fences, sheds, workshops, or other secondary structures.

Personal property. You don't have to provide the insurer with an itemized list of your possessions up front. Usually, personal property is insured for up to a certain percentage of your overall coverage. To fully insure specific items--like jewelry, silverware, stamps, coin collections, and the like--you may have to buy a rider or floater for your policy, which requires that the items be professionally appraised.

Landscaping. If trees, shrubs, lawns, or flowers are damaged due to a peril covered by your policy, you're usually reimbursed for them up to a certain amount. Some policies include a provision covering you if a tree has to be removed because it's either fallen on your home or could potentially cause damage.

Temporary expenses. If damage to your home forces you to live elsewhere while repairs are made, like a hotel or apartment, these living expenses should be covered.

Liability. If someone gets hurt on your property, this covers you.

Business property. Most standard home owner's policies won't cover business property if the home owner conducts a business at home. Ask your insurer about a separate policy (at a separate premium) for home business insurance.