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An Introduction to Homeowners Insurance
Presented by: INSERT NAME
Financial Education Program on Insurance
Nationwide and the Nationwide frame are federally registered service marks of Nationwide Mutual Insurance Company.
An Introduction to Homeowners Insurance
An Introduction to Homeowners Insurance
WHAT IS IT?
Risk = the possibility of financial loss
An Introduction to Homeowners Insurance
Why is risk important for insurance?
Risk is what makes you decide whether or not you need insurance.
Risk is what insurance companies measure when determining whether to offer you insurance and how much it will cost.
An Introduction to Homeowners Insurance
Type of home (single family, town home, high-rise)Square footageNumber of roomsFloor level (if in high-rise)Address (city, state, county)PetsPoolProximity to fire station and fire hydrantBusiness being conducted on premises?
Personal property (including furniture, electronics, high value items, etc.)Special safety features (security, alarms, sprinklers) Credit rating of policyholderPrior insurance history (claims filed, etc.)Construction type (brick, frame, etc.)Roof type (shingle, tile, metal, flat, etc)**Amount of coverage required**
Risk Factors for Homeowners Insurance
An Introduction to Homeowners Insurance
What is insurance?
Insurance is a legal contract that transfers risk from a policyholder to
an insurance provider
An Introduction to Homeowners Insurance
WHY DO I NEED HOMEOWNERS INSURANCE?
Your home is likely to be the biggest investment
you will ever make. Losing this asset would cause a financial disaster if you don’t protect it with
insurance.
An Introduction to Homeowners Insurance
The Components of Basic Homeowners Insurance
An Introduction to Homeowners Insurance
What does basic homeowners insurance cover?
• Dwelling – Coverage that protects the structure of the home (roof, walls, wall-to-wall carpeting, etc.).
• Other structures – Coverage for sheds, detached garages and other structures not connected to the main dwelling itself.
An Introduction to Homeowners Insurance
• Personal Property – Coverage for personal items (clothing, furniture, appliances, computers, etc.). Provides coverage on and off the premises.
• Loss of Use – Coverage for when an insured has to move out of the home while repairs are made as a result of damage caused by a covered loss.
What does basic homeowners insurance cover? cont.
An Introduction to Homeowners Insurance
• Liability Insurance – Pays for damages the insured is legally obligated to pay due to bodily injury or property damage.
• Medical Payments – Pays for medical and/or funeral expenses incurred by a person on or off the insured’s property.
What does basic homeowners insurance cover? cont.
An Introduction to Homeowners Insurance
Most homeowners insurance contracts normally include coverage for the following items, but this can vary by company and state. Check your policy to be sure what is and what is not covered.
What does basic homeowners insurance cover? cont.
An Introduction to Homeowners Insurance
• Trees, shrubs, plants and lawns – Coverage is provided to these items if damaged by a covered loss.
• Debris removal – Coverage for removing the remains or rubbish of any property destroyed as a result of a covered loss.
• Fire Department Charges – Provides coverage for customary fire department charges under contract or agreement. May be subject to limits depending on your policy.
An Introduction to Homeowners Insurance
•Fire and lightning •Windstorm and hail •Explosion •Riot and civil
commotion • Impact from aircraft • Impact from vehicles •Smoke •Vandalism and
malicious mischief
• Theft • Falling objects • Weight of ice and snow • Glass breakage• Accidental overflow of
water from plumbing• Accidental electrical
damage to appliances (caused by power surge)
Perils Covered by Homeowners Insurance
An Introduction to Homeowners Insurance
• Flood • Earthquake• Acts of War• Nuclear Detonation
* Depending on where you live, hurricane or windstorm coverage may or may not be covered. Check with an insurance agent to determine if an extra policy is needed to cover these perils.
Perils NOT Covered by Standard Homeowners Insurance(You may need purchase a separate policy!!)
An Introduction to Homeowners Insurance
• Jewelry, watches, furs•Guns•Tools•Cameras, camcorders•Silver, gold, pewter
* Coverage for these items is already included in the homeowners insurance policy up to certain limits. For an additional premium, you can increase the limits of these
coverages to meet your needs.
•Money, coins, securities, deeds
•Watercraft, trailers, equipment, motors
•Computers•Business property
ADDITIONAL COVERAGES*
An Introduction to Homeowners Insurance
LIABILITY COVERAGE
• Protects you against legal claims you are legally obligated to pay for causing bodily injury, sickness, disease or death of others
• Pays the cost of defending a claim against you
• Covers damage to the property of others
An Introduction to Homeowners Insurance
GUEST MEDICAL PAYMENTS
• Covers medical related expenses of non residents
An Introduction to Homeowners Insurance
Protecting Your Personal Property:
Two Options for Homeowners Insurance
An Introduction to Homeowners Insurance
# 1: Actual Cash ValueDefinition: The value of the property lost or damaged
at the time of the loss. This method of valuation takes into consideration depreciation based on such factors as:
• Age of the item• Market value• Condition of the property at the time of loss
or damage.
An Introduction to Homeowners Insurance
#2: Replacement Cost
Definition: The cost of replacing damaged or destroyed property without deduction for depreciation in the value of the property.
An Introduction to Homeowners Insurance
STEPS TO PROTECTING YOUR PROPERTY
An Introduction to Homeowners Insurance
Next Steps
1) Take an inventory
2) Compare quotes
3) Select your
coverage
4) Ask about disaster coverage in your area
5) Check for discounts
6) Select a provider and
apply
An Introduction to Homeowners Insurance
http://www.nationwide.com
Practice Shopping for a Policy
