Introduction of the topic and yourself (name, where you work, job title)

Risk Factors Damage to home Damage to your stuff or personal property Liability from lease or rental agreement Liability from parties on the property Personal liability for activities of people living in the house Costs of temporary housing if home damaged

Who Needs Homeowner Insurance? All different types of people need it… whether they: Rent an apartment or house Buy a home Purchase a vacation property as a second home Buy property for rental income or investment Type of insurance is different based on whether you own or rent, the type of home it is and how you will use the property – residence or rental income Go over the basics of homeowners insurance. Briefly discuss different types and most common forms of it.

Homeowner Policy Forms HO-2, HO-3, HO-5 and HO-8 all cover one or two-family homes Major difference is perils or things that can cause damage to the home HO-3 is the most popular Least Most Amount of Coverage HO-2 & HO-8 HO-3 HO-5

Renting an Apartment or Home Do You Need Insurance? Write down everything you can remember in your room, house – furniture, clothes, electronics, etc. Make an inventory list and include the value of the property Visit the website: www.knowyourstuff.org

HO-4 Renters Insurance Your landlord may have insurance, but it only protects their building Your belongings are not covered under their policy Each roommate needs their own policy An average two bedroom apartment can easily contain personal property that would cost more than $20,000 to replace Instructor- 1 minute…another slide with what is covered….

Renting an Apartment or Home Do You Need Insurance? What if you had a fire and had to replace your stuff? How much would that cost? What if someone got hurt on your property and sued you? Do you have enough in savings to cover court costs and obtaining a lawyer? What if your luggage was stolen while on a trip? The HO-4 homeowner renters policy will cover you in each of these situations

HO-4 Renters Insurance Renters insurance protects individuals who live in a house, mobile home, condominium or apartment that is owned by another person You are protected against: Theft Loss of personal property Loss of use of the apartment due to damage Liability from activities Instructor- 2 minutes- go over what is covered briefly relating it to the exposures and perils discussed earlier.

What if I live in a Condo? Some condo unit owners may be responsible for some of the building structure Be careful and find out what is your responsibility to insure and what the condo association insures Condo owners also need to insure their personal belongings and need liability coverage in case they are sued The HO-6 condo policy will cover you but make sure you ask about desired limit and optional coverage.

Two Major Sections of a Homeowners Policy Property Coverage Dwelling & attached garage Other structures – detached garage, shed, gazebo Personal property- furniture, clothing Loss of use – expenses to live elsewhere when home is damaged Liability Coverage Personal liability Medical payments to others Go over what is included in the homeowners policy. Give examples and real life stories to illustrate.

Match the Homeowner Resident of a single-family home Tenant in a rented home Owner of a 40-year-old home Owner of a condo unit Owner of a two-family residence HO-3 HO-4 HO-6 HO-8 HO-7 Instructor- 5 minutes- let students do this on their own and then go over answers: Trick question- there is no HO-7 HO-3 HO-4 HO-8 HO-6

Who Can Purchase a Homeowners Policy? People owning a home Those renting a home or apartment People who own duplex as long as they are living in one side of duplex Not Eligible: Apartment building owners Farms or ranches Landlords

Homeowner Property Coverage Coverage A Dwelling – cost to replace your home and attached garage Coverage B Other Structures – cost to replace shed, fence, gazebo or detached garage Coverage C Personal Property – cost to replace your contents If you are a renter you don’t have Coverage A or B, but you do have Coverage C to protect your contents

What’s Included in Coverage C Personal Property? Property owned by you and also stuff borrowed and used by you Your contents are covered worldwide so when you travel you luggage is covered Some of your property is limited in how much you can recover (e.g., cash $200 and boats $1500) Some items are limited if they are stolen (e.g., jewelry $1500 and guns $2500) You can purchase additional coverage if needed – also called a “floater” Go over what is included in the homeowners policy. Give examples and real life stories to illustrate.

Is That Covered? Not everything is covered by your homeowners insurance These are not covered: Animals, birds, fish Motor vehicles Aircraft and hovercraft Property of others Business records Go over what is not covered in your homeowners policy. Use examples and different scenarios to illustrate.

Perils That Are Usually Covered by Homeowners Policy Fire Lightning Vandalism Theft Wind damage Tree damage Ask students to name possible perils that could happen to their home. Let a few students answer then click twice to reveal the above perils. You can add more. Use examples and stories to illustrate. Coverage is subject to exclusions on the policy

Common Exclusions All homeowner’s insurance policies contain exclusions for certain perils not covered by the policy – usually catastrophic occurrences Changes in building ordinances or laws Earth movement Water damage including flood Power failure Neglect by insured War or nuclear hazard Intentional loss Go over common exclusions. Use examples and different scenarios to illustrate.

What types of claims are covered? Check with your agent but try to get the broadest coverage commonly known as “open” perils Deductibles apply and may be higher for some occurrences (e.g., wind) Policies have exclusions so check the policy Earthquake and flood are not covered unless you purchase extra coverage

Determining the Amount of the Loss Three questions to ask: Is the event a covered peril? Is there an exclusion on the policy? How much should be paid? Determining value: Replacement Cost: The actual cost of replacing property without a deduction for depreciation Actual Cash Value: Replacement (current) cost minus depreciation Depreciation: Decrease in value of property due to use, age, etc.

What is the difference between replacement cost and actual cash value? List 5 items that you own and can be found in your house Next to each item write down how old it is Next, estimate how much you paid for the item Apply this chart to each item Age of Item Worth Item is less then 3 months old New, no loss in value Item is 4-6 months old 90% of what you paid Item is 7-11 months old 80% of what you paid Item is 1-2 years old 50% of what you paid Item is more then 2 years old 20% of what you paid We always want things to stay the same not get any wear or tear or lose any value. In reality though everything ages and everything loses value. Pass out the worksheet on replacement cost vs. cash value (go to slide show and click on the words “replacement cost” for the worksheet). Go over worksheet, what students need to do, ask if there are any questions. Then allow students 5-10 to complete. Once class seems finish ask for some feedback, what type of items they picked, difference in the two prices, were they surprised at the results

What happens if I can’t live in my house? If your claim is covered by the insurance company then they will also pay for any additional living expenses under a coverage commonly known as “loss of use” Pays for hotel expenses, additional food costs – restaurants and other additional expenses

What To Do When Filing A Claim Call the police if house has been broken into Protect the house from further damage File the claim with your insurance company Allow insurance company to inspect and appraise home Cooperate throughout the whole process Keep all legal papers, they must be sent to insurance company Discuss what you should do if you have to file a claim.