5. Homeowner's and Renter's Insurance

Homeowner’s insurance typically covers the insured and his or her spouse, children, and anyone else under the age 21 living in the household against fire, personal liability  exposure, and other catastrophes. 

Most individuals purchase a homeowner’s policy not only to obtain property insurance coverage against loss or damage to their home but also to obtain insurance protection against the many sources of liability that can arise out of a family’s activities. 

As a rule, it’s a good idea to buy homeowner's insurance that covers as broad a range of catastrophes as possible and most types of losses. Homeowner's insurance policies have three key types of protections:

The following is a checklist to use when determining what the most appropriate type of homeowner’s coverage is:

• What is the premium?
• What is the deductible?
• What are the limits for the various coverage and are they adequate?
• Can you increase the policy limits if your situation changes? What’s involved?
• Is personal property covered for replacement cost?
• Do you need any special types of coverage either because of where you live or your lifestyle (flood, earthquake, personal injury, liability loss exposures)?
• What do friends say about the company?  Do they drop policy holders if they make claims?  Do they usually deny a claim before they pay it?