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standard homeowners policy protects against fire, lightning, wind,
storms, hail, explosions, riots, aircraft wrecks, vehicle crashes,
smoke, vandalism, theft, breaking glass, falling objects, weight of snow
or sleet, collapsing buildings, freezing of plumbing fixtures,
electrical damage and water damage from plumbing, heating or air
conditioning systems, according to the Insurance Information Institute,
a Washington, D.C.-based nonprofit group for the insurance industry.
Such policies are "all-risk" policies, which cover
everything except earthquakes, floods, war and nuclear accidents.
A basic policy can be expanded to include additional coverage, such
as for floods and earthquakes and even workers' compensation for
servants or contractors. Home-based business-coverage, an increasingly
popular rider, does not cover liability associated with the business.
Insurance experts recommend that homeowners obtain insurance equal to
the full replacement value of the home. On a 2,000-square-foot home,for
example, if the replacement cost is $80 per square foot, the house
should be insured for at least $160,000.
For personal items, homeowners can increase their coverage beyond the
depreciated value of items such as televisions or furniture by
purchasing a "replacement-cost endorsement" on personal
property.
Some experts recommend an inflation rider, which increases coverage
as the home increases in value.
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