Homeowners, Condos, Renters & More

Homeowners insurance provides you with financial protection in the event of a disaster or accident involving your home.

In addition, homeowners insurance policies are generally “package policies.” This means that the coverage includes not only damage to your property, but also your liability—that is, legal responsibility—for any injuries and property damage to others caused by you or members of your family (including your household pets).

Basic personal auto insurance is mandated by most states and provides you with some financial protection in case of an accident. But is it enough? What are the options? Learn how car insurance works and what types of coverage are available.

Understanding auto insurance—the basics

Auto insurance is a contract between you and the insurance company that protects you against financial loss in the event of an accident or theft. In exchange for your paying a premium, the insurance company agrees to pay your losses as outlined in your policy.

Auto insurance provides coverage for:

• Property – such as damage to or theft of your car
• Liability – your legal responsibility to others for bodily injury or property damage
• Medical – the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses

WHAT DOES FLOOD INSURANCE COVER?

So, what may a flood policy help protect? FEMA says you can purchase coverage to help protect your home, your personal belongings, or both. Here are some of the basics for these two types of coverage:

Building property coverage

• What it may help protect: The physical structure of your home and its foundation; plumbing and electrical systems; central air and heating systems; attached bookcases, cabinets and paneling; and a detached garage (other detached structures need their own policy).
• How it typically pays out: Replacement cost basis (what it would take to repair the home in today’s dollars) for a primary residence and actual cash value for a vacation home.
• Maximum coverage limit: $250,000

Personal contents coverage

• What it may help protect: Clothing, furniture and electronics; curtains; some portable appliances; freezers and the foods within them; and certain valuables like art (up to a specified limit).
• How it typically pays out: Actual cash value basis (takes depreciation into account).
• Maximum coverage limit: $100,000

WHAT’S NOT TYPICALLY COVERED BY FLOOD INSURANCE?

Equally important is knowing what’s not covered by flood insurance. Here are some of the types of property and expenses that fall outside the scope of a basic flood insurance policy, according to the NFIP’s summary of coverage:

• Moisture or mold/mildew damage that “could have been avoided by the homeowner”
• Currency, precious metals, and paper valuables like stock certificates
• Outdoor property such as decks, fences, patios, landscaping, wells and septic systems, and hot tubs and pools
• Living expenses, like temporary housing (if flood damage deems your home uninhabitable)
• Cars and other self-propelled vehicles (but your auto insurance may offer some coverage for your car)

A specialized jewelry insurance policy provides comprehensive coverage. Coverage against scenarios—like mysterious disappearance (or unexplained loss)—that may not be covered by standard homeowners or renters insurance or by warranties.

Umbrella insurance is extra liability insurance. This type of insurance policy is designed to help protect you from major claims and lawsuits and as a result it helps protect your assets and your future. It provides additional liability coverage above the limits of your homeowners, auto, and boat insurance policies.

Renters insurance is a type of insurance that covers your personal property. If someone breaks into your rental and steals your belongings, your landlord typically is not responsible … unless you can prove the landlord was negligent by, say, not providing a lock for your doors or windows. Otherwise, you’ll have to pay to replace what was taken or damaged. But renters insurance would cover the cost of replacing the items. It also often covers damage to your belongings from fire, vandalism, and other disasters.

Renters insurance covers your stuff even when it’s not in your home.

Any valuables you keep in your car or that you bring with you, such as on vacation, are covered by most renters insurance policies. Renters insurance will reimburse you the same amount whether your bike is stolen from inside your apartment or while parked outside your favorite coffee shop, but whether your insurance pays what your property is worth (actual cash value) or the cost to replace it (replacement-cost coverage) depends on the details of your policy.

It covers damage to other people’s stuff, too.

Your renters insurance policy sticks with you when you (or, say, your kids) go out into the world, such as to a friend’s house or shopping. “If your kids decide to play around in the china department of a store, can you afford to pay for the damages to the merchandise?” that’s property damage liability, and renters insurance pays for that.”

You could stay in a hotel in case of emergency.

If your rental unit is unlivable for a time because of damages from a fire or a storm, the cost of a temporary hotel stay would likely be covered by renters insurance. Your policy should kick in even if your neighbor has a fire and management has to turn off utilities to your building for a few days to make repairs. “Loss-of-use coverage on your policy could take care of that for you,”

You’re covered if someone gets hurt on your watch.

What if one of your friends is injured in your apartment? If a friend rolls an ankle because they stepped on your dog’s chew toy in your living room, you’re liable for the medical costs. You’d also be accountable for legal costs if your guest filed a lawsuit. But if you have renters insurance, the liability part of the policy will cover that. It also covers damage to the apartment that you cause, such as water damage from letting a bathtub overflow. The landlord will probably sue you to pay for damages not covered by your security deposit, and that’s when your insurance would kick in.

Third-party property damage? Covered.

Let’s look further into that overflowing-bathtub scenario. What if, in addition to damaging your apartment, the overflowing tub also caused damage to your downstairs neighbor’s unit? Or what if you drove your car into your neighbor’s fence? Renters insurance would typically cover the cost of repairs in both instances.

An important note about property damage: Renters insurance doesn’t typically cover damage done to your rental property by another person. If someone were to break your window, for example, and that person doesn’t have renters insurance, you’d be on your own for working out the costs.

That’s why you need condominium insurance designed specifically for condo or co-op owners. Condominium policies help protect your personal property and the interior of your unit. You will also have liability protection for bodily injury or property damage to others.