what is home insurance

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What is home insurance?
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HOI - Home insurance

• Home insurance, also commonly called homeowner's
  insurance , is a type of property insurance that
  covers a private residence. It is
  an insurance policy that combines various
  personal insurance protections, which can include
  losses occurring to one's home, its contents,
  loss of use (additional living expenses), or loss
  of other personal possessions of the homeowner,
  as well as liability insurance for accidents that
  may happen at the home or at the hands of the
  homeowner within the policy territory.

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Pricing

• Major factors in price estimation include
  location, coverage, and the amount of insurance,
  which is based on the estimated cost to rebuild
  the home ("replacement cost").
• If insufficient coverage is purchased to rebuild
  the home, the claim's payout may be subject to
  a co-insurance penalty. In this scenario, the
  insured will be subject to an out of pocket fee
  as a penalty. Insurers use vendors to estimate
  the costs, including CoreLogicsubsidiary Marshall
  Swift-Boeckh, Verisk PropertyProfile, and
  E2Value, but leave the responsibility ultimately
  up to the consumer. In 2013, a survey found that
  about 60 of homes are undervalued by an
  estimated 17 percent. In some cases, estimates
  can be too low because of "demand surge" after a
  catastrophe. As a safeguard against a wrong
  estimate, some insurers offer "extended
  replacement cost" add-ons ("endorsements") which
  provide extra coverage if the limit is reached.
• Prices may be lower if the house is situated next
  to a fire station or is equipped with fire
  sprinklers and fire alarms if the house exhibits
  wind mitigation measures, such as hurricane
  shutters or if the house has a security
  system and has insurer-approved locks installed.
• Typically payment is made annually. Perpetual
  insurance which continues indefinitely can also
  be obtained in certain areas.

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Covered perils

• Home insurance offers coverage on a "named
  perils" and "open perils" basis. A "named perils"
  policy is one that provides coverage for a loss
  specifically listed on the policy if it's not
  listed, then it's not covered. An "open perils"
  policy is broader in the sense that it will
  provide coverage for all losses except those
  specifically excluded on your policy.

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Home insurance Basic-form covered perils

• Basic-form covered perils
• Fire
• Lightning
• Windstorm or hail
• Explosion
• Smoke
• Vandalism
• Aircraft or vehicle collision
• Riot or civil commotion

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Home insurance Broad-form covered perils

• All basic-form perils
• Burglary, break-in damage
• Falling objects (e.g. tree limbs)
• Weight of ice and snow
• Freezing of plumbing
• Accidental water damage
• Artificially generated electricity

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Home insurance Special-form excluded perils

• Ordinance of law
• Earthquake
• Flood
• Power failure
• Neglect
• War
• Nuclear hazard
• Intentional acts