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A 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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