Buying Insurance

Lesson 3: Homeowners and Renters Insurance

Exercises Lesson 3

Your best friend just bought a house. It's an older house, a "fixer upper", but your friend is handy and will do a good job on the improvements. Although he is single, your friend bought into a family neighborhood and is surrounded by children. He has a dog and an above ground swimming pool, but he works long hours and also does a lot of volunteer work and gratuitous civic work, so he is seldom home to enjoy the dog or pool.

Taking all of the above into consideration, what suggestions might you make to your friend regarding his homeowners insurance? Are there any optional coverages, or additional policies he should consider? Why? What dollar limits do you think might be appropriate? Why? What do you think will happen relative to his insurance as your friend continues to update and imrove his house?

2.If you own a condominium or townhome, go to your board and ask the following questions:

Are all buildings and faciliies required to be insured by the association insured for full replacement cost?

Does the association have Liability insurance in the amount of at least $1,000,000?

Does the association have a Liability Umbrella policy with limits of at least $1,000,000?

Does the association have Workers Compensation insurance, even if there are no association employees?

Does the association carry non-owned auto insurance to cover people who might have an accident while using their own autos to run errands for the association?

Are the directors and officers of the association protected by Directors and Officers Liabillity insurance?

Remember, as a unit owner you can be assessed for your share of any uninsured losses.