Affordable Home Insurance

Home ownership: it’s an American dream. But buying a place of your own or settling the family in new digs requires financial commitment. That means saving for a down payment, getting the right loan and—perhaps most importantly—finding affordable home insurance.

Whether buying a first home or a fifth, all homeowners need insurance to protect against the unexpected. That’s where we come in.

With some basic how-tos, money-saving insurance strategies and affordable quotes, protecting your home affordably is as easy as 1-2-3!

Learning Insurance Basics

When buying a new home, lenders require insurance information up-front. To make things quick and easy, try contacting insurance providers online. Let them know what you’re looking for, examine several price quotes, and choose the insurance plan that fits your budget best.

Once a policy is in place, supply the lender your insurer’s name and contact information, coverage levels and deductibles. They’ll add this information to the new home contract and escrow insurance as part of your monthly expenses.

If insuring an existing home, don’t just stick with the same insurance company year after year. Though commendable, loyalty may keep you from getting the best deal. Think instead about current rates, make home improvements and discuss discounts with home insurance providers. Then settle on the broadest coverage for the least money.

Maximizing Home Insurance Savings

Use these money-saving tips to save 60 percent or more on the right protection at the right cost—no matter which insurer you choose.

• Set deductibles as high as possible. Doing so could slash as much as 25 percent from insurance rates.
• Buy insurance for car and home from the same provider. This could garner an additional savings of up to 15 percent on insurance rates.
• Install security or safety devices. This extra protection makes homes more secure and can score another 20 percent in savings.
• Eliminate unnecessary coverage. Save a bundle by getting rid of extra, unneeded coverage on items no longer owned or greatly depreciated.
• Make home improvements. Update electrical or plumbing systems, or add items like deadbolt locks for a sizeable discount.
  

Home insurance rates can vary by thousands from one insurer to the next. So learn insurance basics, take steps to shave costs from your policy, and shop for low insurance quotes. Then insure that home affordably today—and rest safely and securely for years to come.

Protection From Winter Storm Damage

Winter's here, and with it comes inclement weather. Here are some questions and answers on how to make sure your property is insured against winter storm damage.

Won't my landlord's insurance provide coverage for damage to my personal property?

No. Your landlord's insurance will provide coverage only for damage to the building itself, not to your personal property. As a result, you may want to purchase renters insurance to protect your property from winter storm damage.

What type of winter storm damage does renters insurance cover?

Standard renters insurance provides coverage for damage to your personal property that results from any of the named perils that are listed on your policy (e.g., hail, wind, fire). As long as the winter storm damage results from one of these named perils, your personal property should be covered.

What if the damage is the result of a flood?

Basic renters insurance doesn't provide coverage for damage that is the result of a flood. If you live in a flood-prone area, you'll need to purchase a separate policy or add a rider to your renters policy for this type of coverage.

What is the difference between replacement cost and actual cash value coverage?

When you purchase renters insurance, you'll want to know whether the policy provides replacement cost or actual cash value coverage for damaged property. Replacement cost coverage pays the actual amount of what it costs to replace the items that are damaged. Actual cash value coverage pays an amount equal to the depreciated value of the item that is damaged. Premiums for replacement cost coverage are higher than those for actual cash value coverage.

Are there any coverage limits for damage to my property?

Most renters insurance policies have coverage limits for certain items, such as jewelry. As a result, you should consider adding a rider to your policy or purchasing a separate policy that is specifically designed to protect your valuables.

How much will it cost?

The cost of renters insurance varies, and depends on factors such as where you live and the coverage amount, but most people are surprised at how low premiums are. So it's important to shop around and compare policies to make sure you're getting the absolute best deal.

Preparing for winter storm damage claims

There are some steps you can take to prepare yourself in case you ever need to file a claim for winter storm damage:

• Prepare a household inventory by photographing or videotaping items
• Keep receipts for valuable items
• Have insurance information handy (e.g., insurance company phone numbers, insurance policy numbers)
• Keep copies of the documents and information you've compiled in a safe place outside the house

How Umbrella Policies Can Benefit You

You may hear the words "umbrella policy" and scoff, thinking "why would I need that?" But anymore, we live in a highly litigious world, and not a day goes by where there is not a story in the newspapers about a new lawsuit being filed-both for serious and for frivolous reasons. If you want to protect yourself in the event you are served with legal papers, Insurance.com suggests you look into getting a personal liability umbrella policy.

Umbrella policies give extra cushion to both your homeowners and car insurance policies. David Roush, CEO of Insurance.com says, "It's a good idea to have an umbrella policy if you want to cover assets that may be at risk." He goes on to say that "if you are involved in a lawsuit and your liability coverage isn't enough to cover the claim, having an umbrella policy will help protect your home, your car, and anything else that someone may go after in trying to collect."

Who needs an umbrella policy?
Like when it comes to considering purchasing any type of insurance, be sure to evaluate what assets you want covered and what the likelihood of you getting sued is. It may be more cost-effective to raise your liability limits with your homeowners insurance, rather than buying an umbrella policy. Also, by raising your deductible, you may ultimately pay less for your premium than you had originally been paying. No matter, with the commonality of million-dollar settlement verdicts, an umbrella policy may be the best way to go.

For example, if you own a swimming pool, hot tub, trampoline, swing set, or even pets, it would be a good idea to consider getting an umbrella policy. If you don't regularly have people over, and your pooch couldn't hurt a fly, it may not be that important. However, if you generally have guests over and your dog tends to snap or bite people, then purchasing an umbrella policy might be a wise idea.

What does a personal liability umbrella policy protect?
When you buy a personal liability umbrella policy, you are buying a broader insurance coverage range with higher liability limits. Primary policies generally cover bodily injury and property damage, but with personal liability umbrella policy coverage, you can include personal injury, property damage or bodily injury-which may be caused by you, your pets, or your dependents. Along with a personal injury protection, you may be covered in the unfortunate event of:

• False arrest
• False imprisonment
• Defamation
• Invasion of privacy
• Malicious prosecution
• Eviction
• Wrongful entry

Some umbrella policies go as far as giving you coverage if you're charged liability while actively participating on the board of a charitable, religious or civic organization. It's important to realize that even if the lawsuit is frivolous or silly, you will still need to pay the expenses for defending yourself.

When umbrella policies go to work
After your liability insurance in your homeowners or car insurances has run out, umbrella polices will kick in. They cover the amount above what your homeowners or car insurance policies capped out, up to the limit you selected. Many companies will only issue you an umbrella policy if you have both your car and homeowners insurance with them. Also, they may require your liability limits be at least a certain amount. The reason that most umbrella policies are so inexpensive is that the policy is just added protection. If you are sued, the bulk of the cost is taken from your homeowners or car insurance, then the rest falls on the umbrella.

Umbrella policy exceptions
Umbrella policies vary from state to state, so depending on where you live, your umbrella coverage may not cover you for everything and anything you may be sued for. For example, many policies won't pay for punitive damages-which are generally used to punish people for their conduct. Intentional acts are another that may not be covered by an umbrella policy, as well as if a claim comes from a business endeavor.

There are always exclusions and loop-holes when it comes to umbrella policies, so be sure to talk with your insurance agent and fully understand what your coverage entails, so you don't get any funny surprises down the road. If you are interested in getting a homeowners insurance or car insurance quote, visit Insurance.com. Here you will be able to evaluate multiple rates from best-in-class homeowners and car insurance providers - helping you find the best homeowners and car insurance coverage for you and your family.

Does Roommate's Renters Policy Cover Me?

This is an increasingly common question among young singles and other unmarried individuals who choose to share a house or apartment. Unfortunately, renter's insurance and other homeowners insurance policies are designed for single individuals and traditional families. So when unrelated individuals share a residence, insurance coverage can become complicated.

Insurance laws on this topic vary from state to state, and homeowners and renters insurance policies vary from one company to the next. However, most insurance companies recommend that each tenant maintain a separate renters insurance policy to cover his or her personal property. You should each create an inventory of your possessions, so there are no questions about which policy covers which items if you ever have to file a claim.

Some insurance companies allow multiple roommates to be listed on a single renters insurance policy. If your insurance company structures policies in this way, you and your roommates can purchase one renters insurance policy to cover all of your collective possessions. Each person's name should be listed on the policy, and you should make sure you purchase enough insurance to cover everyone's property. You'll have to remember to change your policy, however, if a roommate moves out or if a new roommate moves in.

Things become even more complicated in the case of unmarried couples living together. Some renters insurance policies automatically extend coverage to any resident of the policyholder's household who fits the definition of "domestic partner." But these policies are the exception, not the rule. In most cases, each partner will need to have a separate renters insurance policy to cover their personal property. But this is not a perfect solution, because even unmarried couples often have joint property. The best option in this case may be to keep detailed records of who actually purchased what, allowing you to make an accurate claim if the need arises.

Insurance During New Home Construction

You should consider home insurance for your new home during construction. If you don't, you may be exposing yourself to a great deal of risk if a fire, theft, or other event damages or destroys your partially-completed home.

One way to cover your new home during construction is by purchasing a standard homeowners insurance policy. This will cover you for any damage to the building as it's being built, and may also provide some coverage for theft of building supplies (although the contractor's insurance should also cover this). It also provides liability coverage, which may come in handy if one of your friends trips during a "tour" of your dream house and decides to sue you. However, the policy will not cover your personal property until the building is secure or "lockable." Once construction reaches this point, you can add on homeowners insurance coverage for your personal property.

Another option is to purchase a "dwelling and fire" policy. This type of policy covers damage to the physical structure, but provides no theft coverage. A dwelling and fire policy may be an appropriate choice if you are living in your old house during construction, because the homeowners policy on that house would cover theft of items from the construction site. Dwelling and fire policies also provide liability coverage, just like a standard homeowners policy.

Once the building is complete, you should re-evaluate your coverage. If you opted for dwelling and fire coverage, you may need to purchase a full homeowners policy. If you bought standard homeowners insurance, make sure you have purchased the right amount of insurance, especially if you have made alterations to the original building plans (e.g., adding on a room or upgrading building supplies).

Legal Liability for Landscaping Help

Many homeowners who hire help are not aware of the potential legal hassles that can ensue when an accident occurs on their property. Workers, such as the kid mowing the lawn, the housekeeper tidying up your home for a big party, or the landscaper planting your annuals, could suffer an injury while on your property. After an accident, you may be financially liable for the worker's injuries and disabilities, and your homeowners insurance policy may not cover you in the event of a lawsuit.

Employees vs. independent contractors

One of the factors used to determine if you are liable for a worker's injury is whether the person is considered your employee or is a contractor (or subcontractor). As a general rule, whether a person is considered an employee or a contractor hinges on the amount of control you have over the worker. If you have the right to control what must be done and the manner in which it is to be done, the worker is probably your employee.

For example, you hire someone to care for your children and do light housework in your home. This worker follows your instructions about childcare and household duties, and you provide the supplies used to do the work. This person is your employee.

Generally, if the worker can control how the work is done, the worker is a contractor. A contractor usually uses his or her own tools and offers services to the general public in an independent business.

For example, you hire someone to care for your lawn. This person provides their lawn care services to other homeowners, uses their own tools and supplies, and hires and pays any helpers they need. Your lawn care provider is an independent contractor, not your employee.

Note: This is an oversimplification. The rules regarding employee and independent contractor status are very complex. If you have any uncertainty regarding a worker's status, you should consult a tax professional.

Workers' compensation insurance for employees

If you have employees (such as a housekeeper, gardener, nanny, cook, etc.), your state may require that you carry workers' compensation insurance coverage for them. Even if you are not required by state law to carry workers' compensation insurance, it may be wise to do so anyway. If an employee is injured, and if you have hired the worker legally and paid for workers' compensation insurance, an injury claim would fall under that policy's coverage. Otherwise, the claim would fall on you. Your homeowners insurance policy is not likely to offer any coverage in this event. If you are hiring regular help who could be considered employees, make sure you consult your insurance agent and/or your state Workers' Compensation Agency about coverage.

Workers' compensation insurance for independent contractors

Contractors, such as builders, landscapers, or other tradespeople who work on or around your home, should be covered through their own (mandatory) workers' compensation insurance, and any injury claims would be covered under that policy. If, for some reason, the contractor does not have coverage or has discontinued the policy to save on the premiums, you would be next in line to pay for a worker's injuries and/or disabilities that occurred on your property (although you may be able to file a lawsuit against the contractor).

If you are hiring a contractor for a job on your property, ask for written proof of the following to cover worker injuries, property damage, and uninstalled materials:

• Contractor's license
• Workers' compensation insurance
• General liability coverage
• Proof of workers' compensation insurance for any subcontractors working on your project

Check with the carrier listed on the proof-of-insurance certificate that the coverage is still in force. Verifying the contractor's insurance coverage before the work begins can allow time for the contractor to correct any problem with lapsed insurance, or for you to find another contractor.

What your homeowners policy may cover

In some states, homeowners insurance policies contain a provision or endorsement providing limited coverage for minors performing lawn mowing or other similar tasks requiring the use of power tools. Some policies specifically exclude domestic workers such as nannies or housekeepers, while others cover injuries of household employees only under the liability coverage section, so a lawsuit may be required before a claim is paid. Check with your insurance agent.

You may need extra liability coverage

In addition to the liability coverage provided under your homeowners policy, you may want to consider additional liability coverage to protect your assets in the event of a liability judgment that exceeds the limits of your homeowners insurance. Such coverage may be called an excess liability policy, or a personal umbrella liability policy. This type of coverage supplements the liability coverage provided under your homeowners policy.

Check references

Don't forget to do reference checks on people you are considering hiring to work on your property. Reputable tradespeople should be willing to provide you with customer references. In addition, you can check with the Better Business Bureau to see if a business has received complaints (and if the problems were rectified). Your local building department can tell you if a particular trade requires certification or licensing, as well as the name of the local licensing body or official. Don't forget to verify that any insurance policies held by a contractor under consideration are still in force.

Tips on Renting a Vacation Home

Many travelers head off on vacation each year without giving any thought to their insurance needs. Are you one of them? You may think that you've planned your vacation down to the last detail, but there's always something that gets left behind. Don't let it be your insurance.

What if the weather takes your vacation by storm?

A big bad storm can huff and puff and blow the house down, but it's probably not your problem. Similarly, if faulty wiring in the house causes a fire, the owner of your vacation home will need to contact his or her insurer. But in certain circumstances, you could be held responsible for damages, so review your liability coverage before you go.

It needn't be a total loss

You've been saving for months and planning the perfect getaway. But what if the luxurious beachfront home you've rented gets washed away with the tide, right in the middle of your vacation? Your vacation would likely come to an abrupt halt, but it doesn't have to be a total loss. You can purchase trip interruption insurance before you go. It's designed to reimburse you up to the amount you paid for your vacation home. But before buying it (perhaps through the agency that rented you the home), read the policy so you'll know what's covered.

There's no place like home

Homeowners insurance is designed to protect your home and many of the personal items inside. But what if you're staying in another person's home or a rental property--will you still be covered? Most basic homeowners policies will pay up to 10 percent of your policy's limit (e.g., $10,000 on a $100,000 policy) for damage to your personal property that occurs away from home. But if you're traveling for more than two weeks, you should contact your insurer to see if you need any additional coverage.

Protecting the family jewels

If you have any special or high-value items (e.g., jewelry, computer or video equipment) with you, consider adding a special endorsement to your homeowners policy to specifically cover these items. This coverage is important whether you travel or not. You'll see a slight rise in your premium, but it's a small price to pay compared with the cost of replacing that three-carat diamond you wear every day.

Empty Nesters: Tips For Downsizing Your Home

You've waited patiently, 18, 25, maybe even 30 years, and it's finally happened--all of your kids are out of the house. Now that you've had some time to enjoy your freedom, you may have discovered that all of those extra bedrooms make your home feel a little empty, and you're thinking about moving. Whether you're moving to a smaller house, a condo, or an apartment, your home insurance needs are going to change.

When size matters

If you've chosen to buy another single-family home, you'll be looking at the same type of homeowners policy as you have now. However, you're likely to see a change in your premium (i.e., the amount you pay). That is because the amount of protection you choose is based in part on your home's value, which in turn affects your premium.

Life in a condo

Moving from a house to a condominium can be a big adjustment. When you buy a condo, it typically means that you own your individual unit and a percentage of the common areas. Review (or have an attorney review) the condo documents before you purchase your condo. These documents include:

• Bylaws
• Rules and regulations
• Master deed
• Master insurance policy
• Financial statements

Don't just browse through these documents. Read them carefully, because they'll answer important questions like:

• Where does my sole ownership end (i.e., bare walls or studs in)?
• What is covered under the master insurance policy? (You may need loss assessment coverage to pick up the shortfalls of the master policy.)
• How large is the operating budget?
• How large are the financial reserves?
• How are trustees elected?

Show the master insurance policy to your insurance agent to get the right amount of coverage. You're likely to find that your condo insurance is less expensive than your homeowners insurance. That is because you're no longer paying to insure an entire building. Now, you're paying only to insure your unit.

Renting has its advantages

As a renter, you'll enjoy greater freedom than you did as a homeowner. If you sign a typical one-year lease, you're responsible for paying rent (and not causing damage) and your landlord is responsible for maintaining the building. So if something breaks (e.g., plumbing, windows, appliances), you call your landlord, and hopefully the problem will get fixed in a short amount of time, costing you nothing.

You'll even get a break on your insurance. That's right--even as a renter, you should still consider buying insurance. Although your landlord typically has insurance to cover the physical structure, it won't cover your personal property or protect you against liability claims. To get these coverages, you need to buy a renters policy. And fortunately, since you don't have to insure the building, your premiums should be quite manageable.

Get a move on

Hiring movers can make your moving experience more pleasant, but it can be very expensive. Still, when compared to the cost of doing it yourself (time and pain), it may be worthwhile. Whether you hire movers or do it yourself, consider buying moving insurance. Different plans are available, so talk to your moving company or truck rental company for more information.

Protect Yourself When Renting Your Home

You absolutely have insurance issues to consider when renting out your home. As you might have guessed, rental property owners have some unique insurance needs. A standard homeowners policy isn't appropriate for rental property, because:

(1) you don't need to insure the contents of the house, unless you provide furnished accommodations;

(2) you need to be more concerned about liability issues; and

(3) you need to protect yourself against the loss of rental income. Your tenants may purchase renters insurance, but even if they do, it won't provide any coverage for you as the owner of the property.

Fortunately, there's a policy designed especially to meet the needs of rental property owners. Most insurers who deal in commercial insurance can sell you a policy specifically for rental property. However, there are many variations among rental property policies. Some provide replacement cost coverage, while others only insure property on an actual cash value basis. Some policies only provide coverage for one or two named perils (such as fire), while others provide much broader coverage. Because of these variations, you may have to shop around to find a policy that provides complete coverage. A good rental property policy should provide the following:

• Broad coverage for the physical structure of the house, on a named-peril or open-peril basis
• Coverage for other structures located on the property (garages, sheds, etc.)--this coverage is often limited to 10 percent of the coverage for the house
• Coverage for your property left on the premises (appliances, maintenance equipment, etc.)
• Coverage for loss of use, if you lose rental income as a result of a covered peril
• Liability coverage for injuries or property damage that occur on the insured property
• Medical payments coverage, for medical expenses that arise from injuries to others on the insured property

New Pool & Your Homeowner's Policy

You've lined up the contractor and the pool supplies, maybe even planned a pool party or two. In all your excitement as a new pool owner, however, it's easy to overlook a more serious matter -- the adequacy of your insurance coverage.

When you install a new pool, you should re-examine your existing homeowners policy in order to determine what additional coverage you may need. Many people fail to tell their insurance agents that they have a new pool, an omission that may prove troublesome in the future should they need insurance coverage as a result of the pool.

Generally speaking, your home insurance provides two basic things: (1) coverage for damages to your home and other structures on the premises (e.g., pools), and (2) liability protection in the event someone sues you. When you install a pool in your backyard, you increase the likelihood that you will need to call on your insurance company to cover you in one or both of these situations.

Damages to your pool

A pool is considered separate from your dwelling and, as such, is covered under the "other structures" portion of your homeowners policy. Comparable structures include sheds, detached garages, and gazebos. The standard amount of insurance for such items is 10 percent of the amount written for your dwelling, though some policies provide 20 percent of your dwelling coverage for the other structures on your property.

For example, assume your insurance policy provides $100,000 worth of coverage on your home and you have the standard 10 percent coverage for other structures. Consequently, your other structures coverage would be $10,000.

If you have several detached structures on your premises and/or if you spent a lot of money on your new pool, the standard 10 percent coverage may not be adequate. In this case, higher amounts of this coverage can be written for specific structures.

Continuing with the above example, if your pool cost $14,000 and you also have a detached garage worth $10,000 and a gazebo overlooking your pool worth $6,000, you might decide to raise the coverage on your pool.

To obtain a higher amount of coverage for your pool, contact your insurance agent.

What types of damages are covered?

The damages you are covered for depend on what type of insurance policy you have. The most common homeowners policy in the United States will protect your pool from all perils except those specifically excluded in the insurance contract. It is the broadest coverage you can obtain. By contrast, under a less common type of homeowners policy, your pool is protected only against the 17 named perils specifically listed in the contract. Make sure you know what policy type you have.

One somewhat common occurrence for which you are not covered -- no matter what policy type you have -- is damage to your pool by freezing, thawing, pressure, or weight of ice or water. If you live in colder climates, make sure your pool is properly "winterized," especially if you have an above-ground pool.

Liability issues relating to your pool

Liability issues relating to your pool are what give insurance underwriters the biggest headache. We've all seen the headlines: "Child drowns in backyard pool." Though this may be the last thing on your mind, it's a fact that a pool presents dangers, not only to your own family members and friends but also to uninvited guests, particularly children. Every year approximately 45,000 people are injured in swimming pools and nearly 300 people drown in backyard pools. So great is the risk of death or injury that some companies won't even write a policy if your pool has a diving board or slide.

The liability portion of your homeowners policy is designed to protect your assets if someone sues you. When you install a pool, you increase the chance that you will be sued if someone is injured or killed as a result of using your pool (even if such use was without your permission).

Consider increasing your liability coverage

Most homeowners policies pay up to $100,000 each time someone makes a legitimate civil claim against you (though some companies offer $200,000 or $300,000 of coverage as part of their basic policy). If the claim against you is more than $100,000, then you are responsible for the difference. As a pool owner, you should strongly consider increasing your liability coverage above $100,000.

There are two ways to increase your liability coverage. First, you can simply purchase higher liability coverage limits on your existing policy. Such coverage is relatively inexpensive; for example, you should be able to increase your coverage from $100,000 to $300,000 for less than $50 per year. Second, you can buy a stand-alone liability insurance policy that is separate from your homeowners policy called an "umbrella liability" policy. An umbrella liability policy pays up to a predetermined limit (usually $1 million) for liability claims made against you or your family. It is more than likely that you will qualify for an umbrella liability policy due to the risks associated with your new pool. Most agents will recommend that you obtain one.

Pool safety rules

There are several safety rules that go hand-in-hand with owning a pool. If you follow these rules, you will likely decrease your potential liability exposure.

• Install a fence around the pool area to prevent people from using the pool without your knowledge
• Never leave small children unsupervised in or around the pool -- even for a minute
• Keep children away from pool filters because the suction may injure them or prevent them from reaching the surface
• Be sure all pool users know how to swim
• Don't swim alone or allow others to swim alone
• Don't allow anyone who has been drinking alcohol to swim in the pool
• Don't swim if you're tired
• Never dive into an above-ground pool and always check the water depth before plunging into an in-ground pool
• Don't allow your children to let their friends use the pool without your permission and/or supervision
• Check the pool area regularly for glasses, bottles, or other potential hazards
• Keep radios, CD players, blow dryers, and other electrical devices away from the pool
• Keep a secure cover on the pool during the offseason
• Comply with any additional local regulations

Contractor/building issues
Insurance for your contractor
In your excitement at getting your new pool installed before summer, don't forget to make sure that your pool contractor has sufficient liability insurance of his or her own. Otherwise, you may end up in trouble if a worker gets hurt on the job.

Comply with local permits, other regulations
Your city or town may also have its own rules regarding the installation of pools. For example, you may be required to obtain a permit for the installation work, or you may be required to install some type of fence or barrier around your pool to prevent it from being accessible to uninvited guests. Check with your local town or city hall to see if any such regulations exist.

Talking to Your Parents About Insurance

Are your parents adequately protected against financial loss? What if your parents' home burns down and there is insufficient insurance to cover the entire loss--can they come live with you? What if one of your parents is held liable for someone's injuries, but does not have liability insurance--will he or she be financially ruined? What if a parent becomes seriously ill and needs long-term care--will he or she have the financial resources to pay for this contingency? What if one of your parents dies unexpectedly--will the surviving parent have enough money to live on?

If you're a member of the baby-boom generation, your parents may be of an age where these concerns may be troubling you. The only way to get the answers and ease your worries is to have a heart-to-heart talk with your mother and father. This may not be easy for some people, but if you shy away from this topic, the consequences could be devastating. Your parents were there to talk to you about the tough issues--now you need to be there for them. How you choose to approach them will depend on the type of relationship you share (e.g. adversarial, open and warm). Here are some tips on how to break the ice:

Prepare for resistance

Your parents may find inquiries regarding insurance intrusive, regardless of the fact that you're trying to help. They may feel it's none of your business, or that it's demeaning for you to assume they haven't made the proper arrangements. Be prepared to explain that you're simply concerned about their well-being and don't mean to be nosy or presumptuous.

Keep it private

A discussion about insurance involves issues that are personal. Broaching the subject in a restaurant or other public setting is inappropriate. Keep the conversation private, and choose a setting where your parents feel comfortable--at their own kitchen table over a cup of coffee, for instance. Also, don't rush the conversation. Even though you shouldn't expect to finish or resolve anything during the initial exchange, be sure you've set aside enough time to comfortably address everyone's concerns.

There's safety in numbers

If you have siblings, encourage a group discussion. If your parents see that all of you feel strongly, they may be more amenable to talking openly and considering your advice. If that's not possible, at least talk to your siblings about your parents' situation. Of course, if you have a sibling who is particularly good at rubbing your parents the wrong way, then perhaps you will want to exclude him or her from the discussion.

Be direct

Sometimes, the best approach is to put all your cards on the table from the get-go. If this is an option for you, find the right time and place, then just say, "Mom and Dad, we need to talk . . ."

The "I have a friend" approach

If a more subtle method is to your liking, you might describe an experience (real or hypothetical) that illustrates the consequences of not being adequately insured. For example, you could say something like: "Joe's father went into a nursing home a few years ago. His father didn't have long-term care insurance, so now Joe has to sell his father's house."

Discuss your own plans

Another indirect strategy is to talk about your own insurance needs or plans. Once the discussion is under way, you can steer the subject in the direction of your parents' insurance needs.

Ask for their advice

Parents are used to giving advice to their kids, not getting it from them. Start by asking them what they think you should do about a particular insurance issue. For example, you might ask if they think you should increase your life insurance now that a grandchild has been born, or drop the collision coverage on your 10-year-old car. From there, you can divert the topic to their own insurance needs.

Ask a simple question

Another "lead-in" approach involves asking a seemingly innocent question, such as: "Who is your insurance agent?" or "do you keep your insurance policies in case of an emergency?" Whatever answer your parents give will be an opening for you to ask other questions that are on your mind.

Bring in the big guns

Perhaps not during the first discussion, but at some point in time you may want to make an appointment with your (or your parents') insurance agent for an evaluation of your parents' insurance situation and needs.

Be patient

Realize that this process takes time. Your parents may need to think things over, and it may take several discussion sessions to work out all the details.

Follow your parents' wishes

Finally, remember that just because your parents have agreed to let you help doesn't mean that you can take charge and do things your own way. You should act only when and how your parents want you to.

Issues to talk about

Once you have successfully begun a dialogue with your parents about insurance, make sure you cover all the pertinent issues. Here are some you should not miss:

• What policies do they currently have?
• What policies do they have, but no longer need?
• What policies don't they have, but need?
• What are the details of their current policies?
• Do their current policies provide adequate coverage? too much coverage?
• How much can they afford to pay for premiums?
• If there are beneficiaries, are the proper persons named? Have the proper designation forms been completed?
• Who should be responsible for paying the premiums (you or your parents)?
• Where are the policies kept?
• Who is their insurance agent?

In addition, make sure you address each type of insurance that may be important for your parents, which may include:

• Health insurance
• Long-term care insurance
• Life insurance
• Homeowners insurance
• Auto insurance
• Disability insurance (though this may not be important if your parents do not have job earnings to replace)

Tornadoes, Lightning etc. - Are You Covered?

Severe weather can pose a major threat to your home and property. Tornadoes, earthquakes, hurricanes, winter storms, severe thunderstorms, and flooding can damage or destroy your home in a matter of minutes. And while you can't control the weather, you can be prepared.

Specific types of severe weather tend to occur in specific regions at specific times during the year. But it is important to recognize that this is not an absolute. For example, tornadoes are not restricted to the Plains states--each of the 50 states has experienced at least one tornado in recorded history. Thunderstorms occur throughout the fall and winter months, in addition to the typical summer outbreaks. Make sure your homeowners insurance is adequate, no matter where you live.

Preparing for the worst
If disaster does strike, homeowners insurance will be important to help get you back on your feet. Check your policy now, and make sure you understand your coverage. Certain events and disasters are not covered under a standard homeowners policy. You'll have to buy separate insurance if you need to protect your property against floods or earthquakes, for example. But it's better to know that before the fact, rather than after.

Generally speaking, homeowners insurance provides three things:

• coverage for damage to your home
• coverage for damage to your personal property
• liability protection

The most common homeowners insurance policy in the United States is known as the homeowners-3 policy or HO-3. If you have this policy, you will be covered for everything except the exclusions outlined in the policy (more on that later).

What is covered

The most common perils for which you will generally be covered under an HO-3 policy include:

• fire and smoke
• lightning
• tornadoes and windstorms
• hail
• explosions
• vandalism
• theft
• damage from vehicles
• falling objects
• loss of food in your refrigerator or freezer due to power outage outside your home (usually up to $500)
• weight of ice, snow, and sleet (except to fence, pavement, patio, swimming pool, or dock)
• accidental discharge of water from plumbing system (i.e. pipe bursts) or freezing of plumbing
• accidental cracking of your hot water heating system
• accidents resulting from your negligence on or off your property (includes damages award to third party, medical bills of third party, and your legal costs--up to policy limit)
• your personal property anywhere in the world (with some exceptions)

Remember, this list is not exhaustive. If it's not in the list of exclusions, it's covered.

What is not covered

Specifically, the HO-3 policy does not generally cover:

• floods (flood insurance must be purchased separately from the federal government)
• earthquakes (can be added to policy)
• war
• nuclear accidents
• structures used for a business (separate insurance is necessary)
• wear and tear on the home, including deterioration, insect and rodent infestation, settling or cracking of foundation or pavement, and damage from domestic animals
• intentional damage
• freezing of pipes in an unoccupied or under-construction house
• theft from a house under construction
• vandalism to a house that has been vacant for more than 30 days
• cars, trucks, vans, motorcycles, aircraft, and boats with anything more than a small motor
• property belonging to tenants
• pets, birds, and fish
• losses resulting from the failure to protect property after a loss

What it all means

Listed out, these disasters and other situations can be hard to distinguish. Instead, real-life examples are often much easier to understand. (These examples relate to HO-3 policies in general. Check with your insurance company for details on your policy.)

Your house...

• Lighting strikes a power line leading into your house and starts a fire--you're covered
• A delivery truck careens off the road and smashes into your house--you're covered
• A plane blows up mid-air and part of the debris hits your house--you're covered
• A pipe bursts in your cellar and covers your downstairs playroom with water--you're covered
• Mice infest your home and chew up your insulation--you're not covered (wear and tear exception)
• The river behind your house floods and you have water damage--you're not covered (flood exception)
• The value of your home in the real estate market plummets because a prison is built on your block--you're not covered (selling cost has no direct relation to insurance, it is intended to cover the costs of rebuilding or repairing)
• A foreign army invades the United States and destroys your home in the process--you're not covered (war exclusion)
• You go on a cruise for 8 weeks and return home to discover vandals have smashed all your windows and torn apart your house--you're not covered (vandalism exclusion for house vacant more than 30 days)
• Your home is damaged for some reason and you need to upgrade it to meet the local building codes when you repair it--coverage depends on the individual policy

Your personal property...

• A wild animal gets into your house and rips apart your upholstery--you're covered, unless the animal is a rodent or your own pet, which is not covered (if the rodent or pet does something to cause a fire, you are covered for the damage caused by the fire.)
• A thief breaks into your home while you are at work, and steals your entire music collection, the family silver, and everything else portable--you're covered, up to the limits stated within your policy and any endorsements
• Your golf clubs are stolen form the trunk of your car--you're covered (without a replacement cost endorsement you will recover only their current value)
• A fire damages your computer equipment in your business over the garage--you're not covered (you need special coverage for your home-based business)

Does Your Insurance Cover Water Damage?

During a cold snap, the pipes in your building freeze and burst. While doing a load of laundry, your washing machine overflows. A heavy rainstorm causes water to leak through the roof of your building--and you live on the top floor. Water damage occurs frequently, so it's a good idea to know what is (and isn't) covered by insurance.

Won't my landlord's insurance cover the damage?

Your landlord's insurance will provide coverage for damage to the building itself, but it won't provide coverage for damage to your personal property. And if your landlord's policy only provides coverage for damage to the exterior of the building (you can find this information in your rental agreement), it won't cover the cost of replacing pipes, carpeting, wall coverings, etc. inside your rental unit. (Depending on the circumstances, your landlord may still be liable for repairs, even if the damage is not covered by insurance.)

What about renters insurance?

A good renters policy will provide coverage for most water damage. Just make sure that it is specifically mentioned in the policy--that way both your damaged belongings and the cost to repair the rental unit itself (e.g., new pipes, carpeting, wall coverings) will be covered. One possible exception: whatever causes the water damage (e.g., dishwasher, washing machine) may not be covered by your renters policy if you failed to maintain it properly.

What if the water damage is the result of a flood?

Basic renters insurance doesn't provide coverage for water damage that is a result of a flood. If you live in a flood-prone area, you'll need to purchase a separate policy or add a rider onto your renters policy for this type of coverage.

What if I can't live in my apartment as a result of the water damage?

Most renters insurance policies will provide coverage for additional living expenses incurred if your rental unit is unlivable. In other words, the insurance company will pay for you to live at another location (at a price similar to your old apartment) while your apartment is being repaired.

My tree fell on my neighbor's porch - whose homeowners policy covers the damage?

Dr. Robert Hartwig knows first-hand how homeowners insurance can come into play when one of your trees fall on a neighbor's property.

If one of your trees falls and damages a neighbor's property, "generally speaking, it is your neighbor's insurance policy that is called upon to pay the damage," points out Hartwig, chief economist of the Insurance Information Institute (III), in New York. "Since his insurance is being impacted," Hartwig continued, "you probably won't face an insurance premium increase as a result."

However, here's a cautionary word from Hartwig, on the basis of his own experience. "Your neighbor could come after you to cover his deductible. Matter of fact, when one of my trees fell on my neighbor's fence, it destroyed some of his fence and damaged fruit trees. In the interest of neighborly relations, I voluntarily paid for a new pear tree, so between what the insurer paid and what I paid, he didn't have any out-of-pocket expense."

The upshot for Hartwig? "My neighbor and I are still on speaking terms, which is a good thing. I paid for the new fruit tree, because I thought it was the right thing to do, although I was not obligated to do that."

Hartwig`s take on the insurance question resonates with Eric Goldberg, assistant general counsel for the American Insurance Association, in Washington, D.C. If a tree falls on your home and the incident happens to involve a covered peril such as lightning, no matter whose tree, your insurance company should pay for your home repair," says Goldberg.

However, Goldberg brought up an exception. That "would be if the damage occurred as a result of negligence," he says. "For instance, if the tree was dead before it fell, and you had proof that your neighbor knew or should have known that the tree was dead, the damage becomes your neighbor's liability."

Under that same type of negligence scenario, Goldberg has something else for you to consider. "You could be held liable if your tree is dying or dead, it falls on your neighbor's property, and you did nothing to prevent property damage." Under that scenario, Goldberg says, "your homeowners policy could come into play."

For example, Goldberg says, "your neighbor could file a lawsuit against you alleging negligence, and if that were to happen your homeowners insurer would defend you and investigate the claim. If it turns out that you are legally responsible for the damage to your neighbor`s house, your carrier will pay for damages up to your policy limits. Similarly, your neighbor simply submit a liability claim against your homeowners insurance policy."

Goldberg's advice? "Ask your insurance provider for clarification if your homeowners insurance contract isn't clear on that issue. If you anticipate a problem -- such as the possibility of your tree falling -- you might consider doing something akin to an ounce of prevention. "If your tree is dead, remove it before it falls. That way you can head off the potential for a bigger bill later and stay on good terms with your neighbor."

Insurance trade group representative Lynn Knauf focuses on the issue of how the standard homeowners coverage includes a section of "additional coverages" under the liability portion of the policy. There is also an "additional coverages" section under the property portion of the policy, says Knauf, director of personal lines for the Property Casualty Insurers Association of America (PCI), in Des Plaines, Ill.

One of the "additional coverages" is "Damage to Property of Others," Knauf explains. "This coverage is typically $1,000, and it covers unintentional damage caused by an insured. The coverage is offered without a deductible because it's under the 'liability' section and offers a minimum amount of coverage for damage without the burden of proving that the insured is legally liable for such coverage."

This amount of coverage for "Damage to Property of Others" is above and beyond the limit of liability in the policy, Knauf indicates. She says that coverage comes in handy "when one damages the property of a neighbor. Most people just pay for damage to a neighbor's property in the interest of goodwill, but where the damage would represent a financial burden some will turn to their homeowners policy."

Knauf offers a final point on the subject. "Keep in mind however, tapping into this coverage will represent a "claim" under the policy - regardless of how small the dollars paid are. The homeowners policy should never be considered a maintenance policy or a 'slush fund' to pay for expenses."

My dog bit the mailman! Does my homeowner's policy cover the mailman's health bills?

Dogs may be known as man`s best friend, but some mail carriers might disagree. That`s because dogs have bitten a goodly number of mail carriers over the years. Fortunately for you, if your beloved Fido grabs hold of the mail carrier and inflicts damage, most insurance industry experts would agree that your homeowner insurance policy should provide coverage for the postal worker`s bodily injury.

Dog bites have serious repercussions for homeowners insurance. The Insurance Information Institute`s Robert Hartwig reports that dog bites account for about 25 percent of all homeowners insurance liability claims, and six percent of homeowner claim costs. The Centers for Disease Control and Prevention reports that more than 4.7 million people are bitten by dogs each year, resulting in about 800,000 injuries that require medical attention. More than half of dog bite victims are children.

Insurance trade organization attorney Eric Goldberg zeroes in on the homeowners` insurance contract. "Under the dog-bites-mail-carrier scenario, coverage would fall under the liability portion of your homeowners insurance contract," explains Goldberg, assistant general counsel for the American Insurance Association in Washington, D.C. The homeowners policy "typically would cover injuries to third parties caused by the policyholder`s negligence," says Goldberg. That could include an incident in which your dog bites the mail carrier who is on your property dropping letters into your mailbox.

However, Goldberg offered a word of caution. "Dog bite injuries are one of the leading causes of liability claims under homeowners policies, so some carriers might exclude that coverage. If you as a consumer are concerned about that exposure, be sure to check for such an exclusion in your homeowners insurance contract," Goldberg adds.

Something else to consider: even with homeowner policies that cover dog bite exposures, there are limits of coverage. The coverage amounts -- often $100,000 or $300,000 – may or may not be enough to cover all of the injured party`s medical bills and pain and suffering, according to Goldberg. That`s where umbrella protection would come in handy for the homeowner. Says Goldberg: "You would pay extra for, say, an additional amount $1 million of protection (umbrella) that would kick in where your homeowners insurance liability coverage leaves off."

Even if you don`t own a home, you should have insurance protection in the event your dog bites the letter carrier on your premises or runs down the block and bites the leg of one of your neighbors, according to Lynn Knauf, director of personal lines for the Property Casualty Insurers Association of America (PCI), in Des Plaines, Ill. "Unfortunately, many renters don`t have renters insurance, and they should because they have assets to protect just like homeowners do. You can lose everything if your dog bites someone and the aggrieved party sues you. If you have renters or homeowners insurance, you`d likely be covered for third-party bodily injury caused by dog bites. But if you don`t have renters or homeowners insurance, you`re on the hook for medical bills, legal expenses and other costs."

Will your homeowner's insurance go up if you buy a pit bull?

Homeowner insurance premiums probably will take a bigger bite out of your wallet if you own a pit bull or other breeds of dog that are known to be aggressive. That's the word from insurance experts such as Eric Goldberg, assistant general counsel for the American Insurance Association, in Washington, D.C., and Dr. Robert Hartwig, chief economist of the Insurance Information Institute (III), in New York.

Says Goldberg: "Insurers compile all kinds of data on potential loss, including statistics on the various breeds of dogs that cause bodily injury by biting people. Chances are you'll pay more for homeowners insurance if you own a pit bull or other type of dog that's widely recognized as aggressive and known to bite people."

Matter of fact, the insurer might decide to non-renew your policy if you own a pit bull, warns Goldberg. The bottom line from Goldberg's perspective? "If you are a dog lover and you are concerned about how much you pay for homeowners insurance, don't buy a dog that is known to bite," explains Goldberg.

To help keep down your homeowner insurance premium, a responsible dog owner should have his or her dog spayed/neutered and have the family pet undergo obedience training at, say, the local humane society. "The insurer might take these matters into consideration, depending on various factors such as the breed of dog and whether it has a history of aggressive behavior," explains Goldberg. "Check with your homeowner insurer about that."

III's Bob Hartwig notes that with certain dog breeds, "you might find homeowners insurance either difficult to get or more expensive. This will be particularly so if your particular dog, regardless of breed, has a history of vicious behavior such as biting a neighbor's child or a visitor to your home."

Dog bite statistics support Hartwig's position. Insurers pay out over $300 million in dog bite liability claims annually, says Hartwig. "Aside from trip and falls," Hartwig says, "dog bites are right up there at the top among homeowners liability claims." Hartwig advises dog owners "to make sure that their dogs are tame, obedient and well-trained, regardless of breed."

Hartwig warns that dogs should not be allowed to run loose around the neighborhood or kept in an unfenced yard, and he cited an example to drive home his point. "You're going to be held legally liable if a child, walking by your house, pets your dog and gets bitten," says Hartwig. "A dog would be considered an 'attractive nuisance,' for which you'll be unable to pin the blame on someone else such as by suggesting that the neighbor's child was teasing your dog."

Insurance trade group spokeswoman Lynn Knauf cites what she describes as "one of the saddest stories that show the potential for harm of certain breeds of dogs." The tragic set of circumstances Knauf was referring to took place in Northern California a few years back. The case centered on 33-year-old San Franciscan Diane Whipple. Whipple was mauled to death by two Presa Canarios, a breed of dog that is frequently bred for protecting property and fighting.

Each year, there are a disturbing number of fatal attacks and horrible injuries caused by certain breeds of dogs," says Knauf, director of personal lines for the Property Casualty Insurers Association of America, in Des Plaines, Ill.

Certain breeds can bite with a force averaging 1,000 pounds per square inch, says Knauf, "while others can bite with twice that force, enough to seriously injure a child or adult in seconds. These fierce and often unprovoked dog attacks are reason enough for some homeowners insurance companies to include such information in risk assessment decisions."

My laptop was stolen from my car. Will my homeowners insurance cover it?

Imagine how awful you would feel if someone breaks into your car and steals your laptop. If that does happen, you could take solace in knowing that your homeowner insurance policy probably would cover such a loss.

"Your homeowners policy generally includes off-premises coverage [that] would provide coverage for your laptop or other possessions you own that were stolen from your car," says Cynthia Heismeyer, assistant vice president of corporate communications for Selective Insurance, in Branchville, N.J. Heismeyer described another insurance wrinkle - "If, however, your laptop was actually 'installed' in your auto, your coverage is under your automobile policy. The amount of coverage you have would be specified in your policy."

"In all likelihood yes, subject to the deductible of course," says Bob Hartwig, chief economist of the Insurance Information Institute, in New York. "There could be homeowners policies that exclude that, so double-check your policy wording to be sure of what's covered and what's not."

Your homeowner policy covers theft. "Your policy follows your possessions around, so if you carry your laptop from your home office to your car, and someone breaks into your car and steals your computer, you'd be covered," says Eric Goldberg, assistant general counsel for the American Insurance Association, in Washington, D.C.

Goldberg offered advice on the matter of policy deductibles. "Homeowner policies have deductibles, which are amounts the insured must pay before coverage kicks in. Deductibles often run $500 or $1,000. Keep that in mind if you are thinking about filing a claim. Let's say that you have a laptop that you bought for $2,000 five years ago. That computer may only have a replacement value of $700 today. That means that if you have a $1,000 deductible, you're carrier isn't going to pay you anything."

Chubb spokesman Mark Schussel took a different approach on the subject. "The old saying of 'an ounce of prevention is worth a pound of cure' applies in this instance. By that I mean, you shouldn't leave a computer, purse, jewelry, or other personal valuables on the front or back seat of your car. Don't leave something in the car that could attract the attention of a thief. However, if you have to leave a laptop in your car, put in your trunk and lock it."

"Under a Chubb homeowners policy, there is coverage for both theft of equipment and for the expense of recreating any data lost with that lap top," says Chubb's Schussel.

Can a claim by a previous homeowner on my house affect me?

Your homeowner insurance premium could very well rise if your house has what one insurance industry official called 'a history of problems.' A home that has "a history of problems, regardless of who owns it, faces higher premiums," emphasizes Dr. Robert Hartwig, chief economist of the Insurance Information Institute in New York.

Offering an example, Hartwig says that "a home with a history of burst pipes would reflect a plumbing problem that hadn't been addressed, so the new owner would probably face a higher premium until the problem is corrected. That should be a homeowner's incentive to make sure his or her home is in good working condition."

Among Hartwig's other observations on the subject …

• A strong statistical correlation has been established between an individual property owner's prior claims history and the likelihood that claims will be filed in the future. Policyholders who file one claim are more likely to file future claims.
• There also is a strong correlation between a particular property's claims history and the probability of additional losses at that location. Properties with a history of claims are likely to have more claims filed in the future.
• As a result, insurers look at claims information related to both the applicant and the property itself. It is important to note that claims history is only one of many factors that go into determining whether to insure the property, and the appropriate premium to charge a homeowner.
• Property claims history reports are collected and maintained in databases by at least two companies: ChoicePoint and the Insurance Services Office (ISO).

Hartwig's position drew no argument from Lynn Knauf, director of personal lines for the Property Casualty Insurers Association of America, in Des Plaines, Ill. "When evaluating applications for homeowners coverage, insurers may consider loss history of the dwelling as well as that of the applicant. Claims relevant to the dwelling may be an important determinate of future risk of loss even if those claims occurred prior to the applicant's purchase of the house.

Unfortunately, some homeowners insurers might find it necessary to take an adverse action on an application without requesting or waiting for proof that prior problems with a dwelling had been resolved or that the potential for future loss has been mitigated. This is because by law insurers have limited time to evaluate new business applications and often lack sufficient time for further investigations," says Knauf.

Offering a different perspective on the subject is Selective Insurance spokeswoman Cynthia Heismeyer. "While a damage claim made by a previous owner won't cause your homeowners premiums to be higher, the claim may be an underwriting factor that causes an insurer to not accept the risk," says Heismeyer, assistant vice president of corporate communications at Selective Insurance, in Branchville, N.J.

Elaborating on her point, Heismeyer offers an example. "While a claim such as off-premises theft would follow the person and not be a consideration during underwriting of a new homeowner policy," Heismeyer adds, "a claim for water damage might indicate a recurrent issue that would need to be considered during the underwriting process."

Your home's loss history is available. The Comprehensive Loss Underwriting Exchange has a data base containing homeowners insurance claims history. "Your homeowner insurer may request a CLUE report on a given piece of property," explains Chubb spokesman Mark Schussel. "A bad report can hurt a seller's chances of getting the asking price, and could make homeowners insurance more difficult to obtain for the buyer."

A hurricane hits and causes my house to flood. Does my homeowners insurance cover it?

Homeowner insurers get flooded with claims over property damage caused by rising waters, and underwriters usually turn them down. The Hurricane Katrina experience, among other things, served as a reminder to consumers that homeowner policies exclude flood exposures.

Worried about possible floods where you live? If so, buy flood insurance from the National Flood Insurance Program (NFIP), advises Lynn Knauf, director of personal lines for the Property Casualty Insurers Association of America (PCI), in Des Plaines, Ill., and Dr. Robert Hartwig, chief economist of the Insurance Information Institute (III) in New York.

"Consumers typically can buy flood coverage through their insurance agent," Knauf adds. "With few exceptions, virtually anybody can purchase the coverage." She warns consumers that they might be lulling themselves into a false sense of security if they see no need to buy flood coverage because they reside in locations that are not prone to floods, hurricanes and other natural disasters.

"Even if you don't live in an area prone to flooding, you may want to consider purchasing coverage," contends Knauf. "Floods can happen in inland areas and away from major rivers in any and all 50 states. If a hurricane hits your area, you'll certainly take comfort in knowing you have flood insurance. Consider buying a flood insurance policy if your house could be flooded by melting snow, an overflowing creek or pond."

One other piece of flood insurance advice from Knauf - "Don't wait for a flood season warning on the evening news to buy a policy-there is a 30-day waiting period before the coverage takes effect."

III's Bob Hartwig discusses why homeowners insurance doesn't cover flood exposures. "Flooding reflects water rising from below, and that exposure has always been excluded from your homeowners policy," emphasizes Hartwig.

As an alternative to NFIP, Hartwig says that there are a small number of private insurers such as Chubb that sell coverage to its customers, but not necessarily in every state. "So you need to check with your agent to see if that particular carrier sells coverage in your state," advises Hartwig

Standard homeowners policies typically cover all perils that are not specifically excluded, says Eric Goldberg, assistant general counsel for the American Insurance Association in Washington, D.C. Water damage is typically excluded, says Goldberg. He also points out that you can purchase flood coverage directly through your homeowners insurance agent. However, flood protection is provided by the National Flood Insurance

Under NFIP, replacement cost coverage is available for the structure of your home, up to $250,000 in limits. However, through NFIP, only actual cash value coverage is available for your possessions. Replacement cost coverage can pay to rebuild your home as it was before the damage, up to NFIP policy limits. In terms of your possessions, NFIP provides actual cash value coverage, which is replacement cost coverage minus depreciation. That means that the older your possessions are, the less you will get if they are damaged. There may also be sublimits on coverage for furniture and other belongings stored in your basement. Sublimits for your possessions stored in your basement typically are less than the overall NFIP limits for your personal possessions.

The federal flood insurance program provides only limited coverage. If you need more coverage than the federal program provides, additional coverage known as "excess" flood insurance is available from specialized insurance companies. Depending on the amount of coverage purchased, an excess flood insurance policy will cover damage above the limits of the federal program on the same basis as the federal program-replacement cost for the structure and actual cash value for the contents, Goldberg says.

Can my credit score affect my home insurance premiums?

It pays to have a good credit history. Case in point: Homeowner insurance companies tend to give their better rates and terms to consumers who pay their bills and loans, in full, on time. A number of homeowner insurers weigh your credit history in making underwriting decisions, confirms Selective Insurance spokeswoman Cynthia B. Heismeyer who explains why.

"Insurance scores, based partially or wholly on your credit information, help insurers assess risk and charge the appropriate rate based upon that level of risk," observes Heismeyer, Selective Insurance`s assistant vice president of corporate communications.

"Statistically, it has been proven that people with poor insurance scores are more likely to file a claim," notes Heismeyer. "Historically, homeowners rates had been based on the characteristics of the structure itself. The insurance industry is now shifting the focus to include characteristics of the occupants, and insurance scores are one of those factors."

Heismeyer says that a credit-based "insurance score" from a consumer`s credit report is used to predict how often he or she is likely to file claims, and/or how expensive those claims will be. Heismeyer indicates that studies by insurance regulators, universities, independent auditors and insurance companies all have shown that an individual's credit history is a proven, strong indicator of how likely that person is to file a future claim.

Here are some basic facts about credit-based insurance scores, according to the Insurance Information Institute, of New York:

• They allow insurers to charge lower premiums to customers who are better risks.
• These types of scores are totally objective and "blind" - insurance scores never factor in a consumer's income, race, address, marital status, age or nationality.
• They promote competition, which means more choice for consumers.

Chubb doesn`t use credit-based scores in homeowners insurance underwriting decisions, but Chubb spokesman Mark Schussel points out that his company has "other ways to determine the acceptability of a risk." Chubb goes "beyond what`s contained in the insurance application," said Schussel who then gave an example.

For instance, Schussel says, the application doesn`t provide enough detailed information about the type of materials and craftsmanship used in a home as well as specific exposures a home faces and what steps a customer has taken to mitigate those exposures. That`s why we visit many of the homes that we insure."

Credit-based insurance scores are "blind" and objective, points out Lynn Knauf, director of personal lines for the Property Casualty Insurers Association of America, in Des Plaines, Ill. She stressed that credit-based insurance scores don`t consider a consumer`s race, nationality, income, marital status or location.

American Insurance Association`s Dave Snyder focused on what he described as one of the benefits of credit scores in the homeowners insurance equation. "They enable insurers to offer many more pricing levels than before," Snyder says. Citing example, Snyder noted that those with "good credit-based insurance scores can get lower premiums on their homeowners insurance than they could have, say, 10 years ago before credit scoring came to the forefront."

"The addition of credit scoring gives the homeowners insurance company a clearer idea on how to price a particular risk and in the process gives consumers assurance that they`re not paying more than they should for coverage," says Snyder, assistant general counsel for AIA in Washington, D.C.

Snyder believes that experience has shown that fiscally responsible consumers who have solid credit histories have fewer losses than those with spotty or poor financial track records. "From the insurer`s standpoint," observes Snyder, "credit information serves as an indicator as to how well a person manages financial risk. A person who keeps his finances in order tends to keep his or her home in good shape, and probably drive more safely as well. In addition, homeowners insurance losses for people with the worst credit tend to run much higher than that of consumers with the best insurance credit scores."

A final thought on credit scores comes from Safeco Insurance spokesman Paul Hollie. "Personal credit reports are available from several organizations, including Experian, Equifax and TransUnion. Reviewing your credit and cleaning up inaccuracies should be an annual ritual, no different than checking on your personal retirement accounts or checking your fire alarm batteries," says Hollie.