Quick Guide to Buying the Best Homeowners Policy Part 2

You may hear the term "standard home insurance policy." Home insurance policies are often similar because there are two organizations that supply policy forms to insurers: ISO Insurance Services Office) and the American Association of Insurance Services (AAIS). 

Some home insurance companies choose to use their own policies. Whichever type your insurer is using, it has to be approved by your state insurance department.

Know the Perils covered in HO-2, HO-4 and HO-6 policies

1. Fire or lightning

2. Windstorm or hail

3. Explosion

4. Riot or civil commotion

5. Damage caused by aircraft

6. Damage caused by vehicles

7. Smoke

8. Vandalism or malicious mischief

9. Theft

10. Volcanic eruption

11. Falling objects

12. Weight of ice, snow, or sleet

13. Accidental discharge or overflow of water or steam from within a plumbing, heating,               air conditioning, or automatic fire-protective sprinkler system, or from a household                 appliance  
 14. Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot             water heating system, an air conditioning or automatic fire-protective system.

 15. Freezing of a plumbing, heating, air conditioning or automatic, fire-protective                         sprinkler system, or of a household appliance.

 16. Sudden and accidental damage from artificially generated electrical current (does not           include loss to a tube, transistor or similar electronic component).

What will vary will be premiums. You can find a wide range of rates among insurance companies for the exact same level of coverage. That's why it's important to shop around.

Basic Types of Home Insurance Policies
Each homeowners insurance policy provides a combination of property and liability coverage and covers loss of use resulting from damage. There are several basic types of home insurance policies:

HO-1

• Basic homeowners policy.

• Covers your house and possessions against 10 different perils.

• HO-1 policies have been discontinued in most states.

  HO-2

• Broad homeowners policy.

• Covers house and contents against 16 perils, which are named in the policy.

  HO-3

• Special form homeowners policy.

• Covers the structure for all perils except those specifically excluded by the policy.

• Contents are covered against perils named in the policy.

   HO-4

• Renters insurance policy.

• Covers contents for 16 named perils and includes liability coverage. It does not insure the      dwelling itself.

• Also includes liability coverage for the renter.

  HO-5

• Premier homeowners policy, generally offered to newer, high-end homes that are well-         maintained.

• Much like the HO-3 policy but contents are covered against all perils except those                 specifically excluded.

• According to the Insurance Information Institute, in some cases, depending upon the              year of construction, the area where you live, your claims history, and other rating                  factors, you can buy an HO-5 for about the same cost as a traditional HO-3.

  HO-6

 • Insurance for owners of co-ops or condominiums.

 • Provides personal property coverage, liability coverage and specific coverage of                    improvements to the owner's unit. Insurance provided by the owner's association                  normally covers most of the actual structure.

 HO-8

• Policy for older homes.

• Covers the same perils as HO-2 but pays only for repair costs or actual cash value,               since replacement cost could make the policy costly.  

• Well-suited for older homes whose market value is considerably less than the cost to               rebuild them.

Home insurance rates

Many factors go into determining the premiums for a homeowners policy. The age of your home, the materials used to build it, where it's located, the square footage and its distance from a fire hydrant all generally play a role in rates.The insurer should be able to give you an estimate for rebuilding your house in the event of a total loss. That estimate should be your dwelling coverage amount.

Replacing personal property      

The extent of coverage for your belongings depends on the loss settlement clause. This clause identifies property that will be valued at actual cash value, and property that will be valued at replacement cost. 

Before buying home insurance, understand the differences among "actual cash value," and "replacement cost." A cash value policy pays for an item's replacement cost, minus depreciation. Replacement cost policies give you more protection than actual cash value coverage. For example, what happens if a burglar steals your six-year-old television set? With  actual cash value coverage, you get only what you would expect to pay for a six-year-old television set. With replacement cost coverage, the insurance company pays to replace your TV with a new set similar to the stolen one.

Extended replacement cost for your house

In another twist to your policy choices, some companies offer coverage for your dwelling that goes beyond its insured value. In other words, your premium might be determined based on dwelling coverage for $200,000, but if your home is destroyed and it costs $215,000 to rebuild, you're covered.

Guaranteed replacement cost coverage pays for the full cost of replacing or repairing a damaged or destroyed home, even if it is above the policy limit. You may have a tough time finding a policy with guaranteed replacement cost.

Extended replacement cost coverage pays a certain amount above the policy limit to replace a damaged home, generally 120 or 125 percent.

Guaranteed and extended replacement cost policies are designed to protect the policyholder after a major disaster when the high demand for building contractors and materials can push up the normal cost of reconstruction.

Home inventories

Many people learn only after a fire or storm that they didn't have enough personal property coverage. Taking inventory will help you decide how much contents coverage you need. It also will simplify the claims process if you have a large loss; no one wants to reconstruct everything they owned from memory.

Your inventory should list each item, its value and serial number, where applicable. Photograph or videotape each room, including closets, open drawers, storage buildings and your garage. Keep receipts for major items in a fireproof place.

Other insurance you may need

Flood insurance

Homeowners policies do not cover flood damage. The National Flood Insurance Program (NFIP) offers flood insurance    

      

Earthquake insurance

If you are concerned about earthquakes, you can get earthquake insurance with a separate policy.

Windstorm insurance

In much of the country, damage from wind is already included in your homeowners policy. But in hurricane-prone areas like Florida, homeowners who want to insure against wind damage needs to buy special windstorm coverage.

Endorsements & add-ons

Home insurance policies contain exclusions and limitations for some types of personal property that are particularly susceptible to loss. Some policies place a specific dollar limit on certain property such as jewelry or antiques.

   

You might want more coverage for certain items than your policy provides. For an extra premium, you can buy endorsements that expand or increase the coverage on these items. Some of the most common endorsements cover jewelry, fine arts, camera equipment, coin or stamp collections, computer equipment, and radio and television satellite dishes and antennas. To insure that these types of items are properly  covered, look into a "scheduled personal property endorsement."

Personal umbrella liability insurance

If you want more liability coverage than your home and car insurance policies provide, you can buy a separate umbrella insurance policy.

Additional Coverage Available

      • Building code upgrades through home insurance companies        

      • Sewer and drain back-ups nationwide.                              

      • Inflation-guard      

      • Special riders for jewelry, collectibles and expensive items if your home is in a special             flood hazard area, you might be required to purchase flood insurance.

Why you should read your policy  

You may renew your home insurance policy each year and never bother to read the new paperwork your insurer sends. But renewal time is when insurers have the opportunity to make changes to your policy. You  won't know your policy has changes unless you read your declarations page each year. For example, insurers that use forms from AAIS might be sneaking in a new exclusion for roof damage that's  cosmetic. So if hail has pock-marked your roof, repairs may not be covered.

   

Also pervasive in recent years has been the spread of percentage-based deductibles for certain perils, such as windstorms. These policies make you liable for 1 to 5 percent of your home's insured value before the insurance company pays. So, if you have a 2 percent deductible and your home's insured value is $250,000,  you're on the hook for $5,000.

Saving money

The best ways to save money on home insurance are to shop around for rates and to make sure you get all the discounts to which you're entitled. 

If you have any questions about your Homeowners Insurance Policy of if you need Homeowners Insurance, call (773) 614-3201

How ObamaCare is Destroying Medicare Advantage Plans

While the  Obama administration is trying to scare people about the automatic spending cuts that are scheduled to hit this Friday, they don't want to talk about its own devastating cuts in Medicare. On Friday, February 15, the Centers for Medicare and Medicaid Services (CMS) announced $716 billion in cuts over the next ten years. Instead of being put this money towards the debt, most of the money will go toward a new entitlement -- ObamaCare's vast expansion of coverage for the uninsured. 

Savings to Come Out of Medicare Advantage Plans
At least half of the savings will come out of Medicare Advantage, under which a full 28 percent of seniors buy privately managed health insurance that often includes added benefits such as vision and dental care or chronic-illness management. In exchange, patients agree to stay within a medical network, which helps insurance companies manage their costs. The program is most popular with Hispanics and African-Americans.  

A study by CMS found that 38 percent of Hispanics and 31 percent of African Americans on Medicare were enrolled in Medicare Advantage, compared with 27 percent of whites. Despite the fact that the program reports high levels of consumer satisfaction,the Obama administration is determined to cut it, even if it means driving millions of seniors back into traditional, one-size-fits-all Medicare. 

  
Restriction of Senior's Choices
They want to restrict seniors' choices by curtailing private plans competing in Medicare. To add cynicism to injury, the Obama administration postponed the Medicare Advantage cuts until after the 2012 election, using a slush fund to tide the program over and conceal the true costs of Obamacare to seniors. The cuts are so much larger than expected that health care stocks tanked across the board after they were announced. The Congressional Budget Office projects that the payment cuts will result in an enrollment drop of 3 million for Medicare Advantage which would turn almost every plan in the industry unprofitable. 


Seniors must pressure their Representatives and Senators to revise or reverse the cuts before they are made final in April. Some adjustments are possible, but the law will continue to mandate a squeeze on Medicare Advantage. President Obama promised Americans in 2009 that "if you like your health-care plan, you can keep your health-care plan." The reality is that not only are millions of Americans likely to lose health-care coverage from their employers, but millions more will lose the Medicare Advantage plans they've grown used to.  

Seniors Will be Forced Back Into Traditional Medicare
Unless it is changed, ObamaCare will relentlessly restrict the choices seniors have by forcing them into traditional Medicare with all of its attendant contradictions, restrictions, and waste. Medicare Advantage has its problems, but they could be surgically addressed. Instead, the bureaucrats running ObamaCare are set on slowly starving the program. By focusing solely on the politics of the sequester, the media are ignoring the Obama administration's bigger, more brazen threat to vulnerable American seniors.


Email your Medicare questions to me at Ask Will , wwillbar@gmail.com.

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Medicare Part B Payment - Know the Truth

Know the Truth about your Medicare Part B Payment. You may be aware that Medicare is a medical insurance program for people who are 65 or older and for people who are disabled at any age. Some people are covered only by one type of Medicare; others opt to pay extra for more coverage. However, understanding Medicare can save you money.

If you're eligible for and want to be covered by Medicare Part B medical insurance, now is the time to sign up. The General Enrollment period for Medicare Part B runs from Jan. 1 through March 31. Before you make a decision about General Enrollment, here is some useful information.

There are four parts to Medicare: Parts A, B, C and D:

Part A helps pay for inpatient hospital care, skilled nursing care, hospice care and other services. 

Part B helps pay for doctors' fees, outpatient hospital visits and other medical services and supplies not covered by Part A. 

Part C allows you to choose to receive all of your health care services through a managed health care organization.These plans, known as Medicare Advantage Plans, may help lower your costs of receiving medical services, or you may get extra benefits which may or may not have an additional monthly fee. You must have both Parts A and B to enroll in Part C. 

And Part D is the Medicare Prescription Drug Program.

There is a monthly premium for Medicare Part B. For 2013, the standard premium is $104.90. Some high-income individuals pay more than the standard premium. Your Part B premium also can be higher if you do not enroll during your Initial Enrollment Period or when you first become eligible.

There are exceptions to this rule. As an example, you can delay your Medicare Part B enrollment without having to pay higher premiums if you are covered under a group health plan based on your own current employment or the current employment of any family member. If this situation applies to you, you have a "Special Enrollment Period" in which to sign up for Medicare Part B, without paying the premium surcharge for late enrollment. 

This rule allows you to enroll in Medicare Part B at any time while you are covered under a group health plan based on your own current employment or the current employment of any family member or enroll in Medicare Part B during the eight month period that begins following the last month your group health coverage ends, or following the month employment ends, whichever comes first.

If you receive disability benefits and have coverage from a working family member, the same rules apply.  If you are already receiving Social Security retirement or disability benefits you will be enrolled in Medicare Parts A and B automatically. However, because you must pay a premium for Part B coverage, you have the option of turning it down.

If you don't enroll in Medicare Part B when you first become eligible to apply and you don't fall under the special enrollment period, you'll have to wait until the general enrollment period, which is Jan. 1 through March 31 of each year. At that time, you may have to pay a higher Medicare Part B premium.


Email your Medicare questions to me at Ask Will,  wwillbar@gmail.com