Consumer's Independent Guide to HOMEOWNERS INSURANCE

Whether you are a first-time home buyer, a veteran of many years of mortgage payments and house upkeep, a condo owner or an apartment dweller, your household is one of some 90 million in the United States. Chances are your home is your single most expensive budget item and - for the home or condo owner - your most valuable investment. Homeowners insurance* is a "package" policy that covers both property - structures and personal possessions - and liability.

Because it is comprehensive, your homeowners insurance policy may include coverage you are not even aware of. If your luggage is stolen from a motel room while you are a thousand miles away from home, for example, you will of course want to notify the police. You will also want to check with your insurance agent about coverage for loss under your homeowners policy. And if your house burns down leaving you without a place to stay, your policy provides living expenses as well as reimbursement for damaged property. There is more.

Your insurance agent can explain your policy in detail. To get you started, this guide from the Independent Insurance Agents of America outlines the key areas of coverage as well as any exclusions or limits that might apply. More than any other line of coverage, homeowners insurance is substantially standardized throughout the United States. The questions and answers in this guide are based on the most commonly purchased homeowners insurance policy (called HO3 in the industry) offering the widest protection.

You may be interested in knowing that claims can consume 80 cents or more of every premium dollar (the exact amount varies from year to year). The rest of that dollar goes to taxes, marketing and administrative costs, dividends and profits. It is in your best interests to be aware now of your protection so that you may select the insurance that best meets your needs.

* Throughout this guide, the term "homeowners insurance" is used. However, for renters and condo owners the coverage for personal property and liability is similar. The main difference, of course, is that you do not need to insure the building. Therefore, almost all the information contained in this guide should be of use to you whether you own or rent, live in an apartment, a condominium, or a home. Questions on specific concerns about condominiums and renting an apartment or dwelling are answered after the general questions.