Home Insurance Los Angeles
Insurance is of many types like auto insurance, life insurance, home insurance etc. Lets now look at home insurance.
Home insurance is also termed as homeowners insurance (HOI) or hazard insurance. A home insurance should cover the full house including the garage, all constructions in the property, furniture, clothes, domestic and electrical devices against calamities like fire, hurricane, or burglary. Before 1950 there were separate policies for damages due to fire, theft etc. But after 1950 there is a single home insurance policy. Now days there are different policies according to the amount of money guaranteed for the types and extent of damage, which is elaborated specifically. For example all-risk policy provides maximum coverage. When there is damage to the property and hence it is being reconstructed, then additional cost of living elsewhere is also borne by the insurance company. There is also liability and personal insurance in an HOI. The liability rider to the insurance covers the cost of treatment of accidental fall or injuries to guests in the damaged house. Perpetual insurance is also a type of HOI where it is not limited by a set term.
There are many features in homeowners insurance like what the structures of the house and items inside the house being insured and what are the calamities identified by the agency. For example one cannot claim for loss of property because of earthquake, nuclear war, flood and Acts of God.
There is an amount to be paid for duration of time so that the insurance is effective. The duration of time is called the term. The amount to be paid is called the premium. The premium amount depends on the possible damage that can happen to the house either big or minimal. In US where a person applies for mortgage loan, they have to buy home insurance as well. This is a sort of safeguard to the money lent by the bank in case of some calamity to the property. The bank will insist on flood insurance along with home insurance, if that area is prone to hurricanes and floods. Similarly the bank will insist on buying earthquake insurance along with home insurance if that area is quake prone. Meanwhile the bank does not insist on home insurance when it finds that the price of the land is well above the repayable mortgage amount. This is because even if the property gets damaged, the bank can still recover the loan because of the high land price. The owner can stop the home insurance once the loan has been paid off, but it does not make sense because the owner will be all the more interested to save his coveted possession.
Recently ISO has provided seven standard policies for home insurance as HO-1 to HO-6 and HO-8. HO-3 is most popular among house owners along with HO-4 and HO-6 being second and third preferred ones.
Lets look at these policies in brief.
HO-1 is a policy that provides coverage for only the items specifically listed in the policy. If an electronic items or furniture is listed then, cover is provided for those items alone.
HO-2 is a policy which covers specific items like HO-1, but here even the calamities are identified and listed in the policy along with the covered items.
HO-3 is a policy which covers all portions of the house along with personal and liability insurance. Here insurer can opt for all-risk coverage. This is the most chosen policy.
HO-4 is a renters insurance which covers the premises against explosion, lightning, hail, riot, sleet, vandalism etc.
HO-5 is an extension of HO-3 because of wider coverage.
HO-6 is for condo owners and hence known as Condominium Coverage. This cover includes the condo as well as the complex in which the condo is located.
HO-8 is a policy which provides better cost than the current market rate for the house. The house is insured for a value lesser than the market value of the house.
Home insurance should be such that the policy and premium paid is convincing. The insurance company should be reliable. In California, there is tie up between various insurance agencies so that the best price is provided to its customers. They provide free quotes when you call them on phone. They send their affable representatives to talk to you in detail about the various home insurance plans. These agencies in Los Angeles also provide online quotes so that you can compare it with that of your other agents. Once you compare the quotes, you can even decide to buy the home insurance policy online by paying securely over the net. The agents in Los Angeles provide home insurance quotes for all types of properties like apartments, townhouses, condos, cooperatives or private houses. There also live representatives available on phone who give financial advice to protect your house against disasters. Home insurance comes as a package of protection to your house as well as its contents.
The home insurance policies depend on whether the owner is staying in the house or has been rented out to someone. There some common home insurance policies such as standard and deluxe.
In Los Angeles there are three options to take a policy:
1. Repairing cost paid: In this policy the repairing cost of the house and replacing cost of your belongings are paid without deducting the depreciation cost.
2. Actual cost: In this policy repairing and replacement cost are paid after deducting the depreciation cost.
3. Guaranteed or extended replacement: This policy gives you full replacement cost even if the reconstruction cost exceeds the policy value. There may be increase in reconstruction cost because of dearth of building material due to widespread damage in that area. Hence this policy gives maximum protection. If there is any additional cost due to latest building codes, then one can endorse their policy with an ordinance or law to cover the extra cost.
Extended policy differs from guaranteed replacement cost. Extended replacement policy will provide 20%-25% more than the policy coverage. Since this policy is so much flexible, the premium is also a bit costly, but it looks worth the money you pay. One need not worry about the extra cost of rebuilding when the costs of building materials increase.
When one buys a condo or a co-op, they need to buy home insurance to cover the personal insurance, liability insurance and other related insurance to safe guard the common areas within the premises, for example lobby, common pathway, roof, elevator, walkways, basement, boiler etc. One needs to take insurance against both liability as well as actual damage even to these common areas. The proprietary lease or condo association bylaws will give you the details about which all portions of your house are insured. An attorney, customer service representative or condo association personnel can explain the intricacies of the policy. The association has to take care of insuring the original structure of the condo or co-op house as it was constructed and sold to the house owners. The house owner has to buy home insurance for the alterations in the house. If the owner prefers to remodel the house according to his taste, then the changed structure should be insured separately by the owner. This may include insuring home appliances, fixtures in bathrooms, kitchen cabinets etc. The association will insure only the roof, walls and floor of the house.
One can take additional coverage like water back-up, umbrella liability, floater or endorsement and unit assessment.
Water back-up: This rider will insure the house against damage due to drain or sewerage problems.
Umbrella Liability: This is an extension to liability insurance to give the house owner wider liability coverage.
Flood or earthquake insurance: These insurance should be purchased separately in addition to home insurance. FEMA National Flood insurance Program offers Flood insurance. In Los Angeles, All Access Insurance services and LLC provide these insurances along with home insurance
Floater or endorsement: One can insure their costly jewelry and costumes against theft.
Unit assessment: If there is damage to the common property such as the lobby, the cost of repair that is calculated per association member to the insured house owner is reimbursed by the insurance company.
This is a brief description of home insurance in Los Angeles
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