Page 2A - THE CHARLOTTE POST - Tuesday, November 21, 1989
The LfOng And Short Of Homeowners', Health Insurance
Last week I got caught up In
the discussion about auto Insu
rance and did not have room to
finish the topic of Insurance
coverage. This week I am going
to talk about homeowner's Insu
rance and health Insurance. I
should be finished with the
whole topic of insurance next
week when I discuss life Insu
rance.
HOMEOWNERS INSURANCE
Homeowner's or Renter's Insu
rance has separate parts to It,
much like auto insurance. It has
liability coverage, which will
protect you from lawsuits aris
ing out of Injuries suffered by
people on your property.
The other part of the coverage
protects your personal posses
sions from theft and your prop
erty from damages due to fire,
hurricanes, etc. This Is the cov
erage that Is Important to most
people and this Is the area
where there Is the most confu
sion.
The first area of confusion be
gins with the premium. Premi
ums for homeowners Insurance
are based on several factors.
Some of these factors are:
1. The value of your house.
, 2. The age of 5TOur house.
' 3. The crime rate In the sur
rounding neighborhood.
1 4 Whether the area Is prone
■to natural disasters, such as
hurricanes, tornado or earth
quake.
5. The type of construction of
house (l.e., wood or brick)
^ In addition to these factors af
fecting the premiums there are
bther factors such as deducti
bles and form. Form refers to
the policy Itself. Homeowners
Insurance comes In different
versions called forms.
• The first form Is basic cover
age, and It covers damage by
fire, lightening, windstorm, hall,
vandalism, riots, smoke and ex
plosions. It also pays for other
peoples vehicles, volcanic erup
tions, theft, damage by aircrafts
knd glass breakage.
The second form Is broad cov
erage. It covers eveiything basic
coverage does and adds: falling
objects, the weight of Ice or
snow, water or steam escaping
from plumbing, heating or air
conditioning systems, the freez
ing of those systems and home
appliances and damage from
short circuits or pxjwer surges.
The most pxjpular form Is Sp)e-
clal coverage: This form pro
vides more coverage than either
basic or broad. It guards your
house against all other perils
Black
Achievers
Honored
By MnXICENT LINK
Po«t Staff Writer
The Fourth Annual Black
Achievement Awards Banquet
will be held at the Highland Jun
ior High School gymnasium
Saturday, December 2 at 6 p.m.
The officers and members of
the Gaston County Organization
for Community Concerns will
host the annual event.
The organization's sole Intend
Is to foster, pwUtlcal, education
al, religious, and social con
cerns of the black community.
The banquet was designed to
recognize one citizen from each
of the 13 Gaston municipalities
who have rendered dedicated
service to the community.
David Moore, president of the
group, said, "In order to be con
sidered as an award recipient,
one must be a resident for five
years and render volunteer ser
vice to help Improve the quality
of life,"
This year marks the second
time a youth award will be pre
sented. Michael McCllnton, a
sopohmorc at Winston-Salem
State University will be the re
cipient.
'The award Is presented to a
youth that has exemplified ex
ceptional work and leadership
In education, politics and In the
church," said Moore,
The following are the 1989
honorees for the for the Fourth
Annual Black Achievement
Awards Banquet: Rev, Kenneth
Alexander, Belmont: Bobble
Ann Hambrlght, Bessemer City;
Milliard Bess, Cherryvllle: Wil
lie Gurganlous, Dallas: Mae E.
Thomas. Elfrleda Brooks,
Charles Costner, Jr,, Elma F.
Dunham, Gastonia: Jeanette
Surratte, Benjamin F. Woods:
Kings Mountain: Jorelda R. Cur-
rence, Lowell: Queen Esther
Gardner. Mt. Holly: Daisy M.
Floyd, Stanley: James Alfred
Lomlck, Tryon: and Michael
McCllnton, Youth Award.
SUBSCRIBEi]
Dollars
and
Sense
By
Leon Orr
not covered by broad or basic
unless specifically excluded by
the policy. Common exclusions
are floods, sewer and drain
backups, earthquakes, war, and
nuclear accidents. To get this
same type of coverage for your
personal property you buy what
Is known as an endorsement.
Some companies add exclu
sions In certain areas. For ex
ample, you may be excluded
from hurricane coverage if you
live In Florida. No homeo'wners
coverage Includes flood cover
age. Generally you have to get a
separate policy through the Na
tional Flood Insurance program.
Even for excluded coverage you
can get coverage, but It usually
Is at an extra cost.
The other complex area In
dealing with homeowner's Insu
rance becomes apparent when
you try to set the dollar figure for
coverage. The coverage should
be large enough to pay for re
building your house. It should
also fully cover much likelier
partial losses.
Insurance companies ■wlU tjrp-
Ically pay you the cost of repair
ing your house up to the dollar
amount of your policy. There is
one small catch to this general
proposition. They will do this
provided the dollar amount of
your policy equals 80% or more
of the cost of rebuilding your
house.
This proposition works In this
fashion. Suppose you have your
house Insured for $60,000. Be
cause of Hurricane Hugo you
had damage to your house of
$40,000. Due to Inflation and
general appreciation the value
of your home is now $100,000.
In this situation the $60,000
worth of coverage Is less than
80% of the value of your home.
ITie company will then use a for
mula which say $60,000 is only
75% of the required 80% or
$80,000. Because it is only 75%
of the required coverage, they
will only pay for 75% of the
$40,000 In damages or $30,000.
It is because of this that you
should review your homeowner's
coverage every few years to
make sure you nave enough cov
erage. Another way of making
sure you have enough coverage
Is to buy a guaranteed replace
ment cost policy.
The guaranteed replacement
cost policy Is more expensive,
but it is worth the extra expense
to make sure you are covered.
With this type of policy your
coverage will Increase along
with the value of your house.
The one catch to this type of
policy is that If you live in a
home more than 40 years old
you may have trouble getting
this type of coverage. The rea
son for this is that a lot of older
houses have architectural de
signs and workmanship that
would be quite expensive to re
place now. The best thing to do
Is talk It over with your agent.
All standard policies will cover
your home's contents (your per
sonal property) for half the dol
lar limit you place on the house.
You may want to pay a little ex
tra here In order to get replace
ment value coverage on your
home's contents.
This type of coverage will pre
vent the company from paying
you for a used couch when
something happens to your 5-
year old couch. Replacement
value coverage will mean that
they pay for a new couch not a
us^ one.
Other coverages you can ob
tain In your policy Include sep
arate provisions or floaters for
special coverage on items such
as jewelry, furs, silverware or
tools. These are needed when
you want coverage beyond the
standard amounts.
Renters insurance generally
only covers furnishing and per
sonal possessions. Therefore
all that you need to worry about
here is the replacement value of
your possessions.
Your homeowners insurance
also has liability protection as
stated before in this article.
Generally this coverage is for
$100,000. You may want to raise
those limits or even get an um
brella policy, as 1 discussed last
week. If you have substantial in
come or assets.
I see that I have run out of
room again this week. I will get
through insurance next week
even If 1 have to shorten my arti
cle. I hop>e you continue to read
and bear with me. Until next
week: Think and Grow Prosper
ous.
Leon Orr is a financial planner
and can be reached CfO The
Charlotte Post or by calling
(704) 525-2063.
For Infornnation On How To Get The Best
News In Town Coll:
376-0496
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