Homeowners Insurance.

Disaster strikes when we least expect it and having homeowners insurance gives us peace of mind from many forms of disasters, but not all. Katrina victims learned the hard way what is and what isn’t covered under basic homeowners insurance. You can add additional coverage through broader policies and Federal Flood insurance. Most mortgage lenders require that you purchase coverage before closing or escrow on a property. Here are some handy tips on homeowners insurance. State laws vary on coverage and limits, be sure to talk with an experienced insurance agent in your state about specific laws and customs.

-Basic coverage. Includes: vandalism, theft, damage from aircraft, smoke, and vehicles, explosions, fire, lightning, windstorms, hail, window and glass breakage.

-Broad coverage. Includes: damage from ice,snow, or sleet. Bursting or freezing of pipes from plumbing, heating or air-conditioning systems and appliances, electrical malfunctions to electrical systems and appliances, structural collapse, and falling objects.

-Liability coverage. Loss coverage for sustained within (condo) or on a property (single-family).

-Deductible. The insures self-absorbed loss expenses before insurance payments are made.

-Replacement costs insurance. Covers the cost of replacing a structure, but not the land. Look for eighty-percent guaranteed of full replacement costs.

-Actual cash value. Replacement costs minus depreciation.

- The Federal Flood Insurance Act of 1968. Homes in floodplain’s should have flood insurance. The Federal Emergency Management Agency oversees this program based on mapping from the Army Corps of Engineers. Most federally related loans require borrowers to obtain flood insurance if they are purchasing a home in a flood plain.