require insurance for at least the outstanding balance of the loan. If your lender requires coverage, you may choose

your own insurance company. You are not required to purchase coverage from the insurance company the lender

recommends.

There are four types of coverage contained in a homeowner's policy: dwelling and personal property, personal

liability, medical payments, and additional living expenses.

Property coverage pays for damage to your home, garage, and other structures as well as damage to or loss of your

insurance. A brick structure, for example, is more fire-resistant than a wood framed structure and it sometimes costs

more to insure a wood framed structure. Many insurers also charge less to insure a newer home than an older one

because newer homes are less likely to sustain damage in storms and fires. The structure's location also affects the

cost of coverage because some communities have better fire protection than others. Some areas may also have

greater crime and vandalism problems.

Most insurance companies divide the state into rating territories. Each city and locality in Wisconsin is given a fire

protection classification ranging from 1 to 10, depending on the amount of fire protection in the area. These rating

classes depend on such factors as water pressure, access to a fire department, and the training and skills of

at least 80% of the replacement cost.

Actual cash value is the value of your property when it is damaged or destroyed. This is usually figured out by

taking the replacement cost and subtracting depreciation. Contents coverage (i.e., furniture, computers, television

Most policies pay for losses to your contents on an actual cash value basis, but a better option is replacement cost

limit that is generally selected first is the amount of insurance on your house. This amount should equal the cost of

rebuilding your home in the event it is destroyed and may be less than the

market value includes the value of the land. Because land values are not insurable under a homeowner's policy, the

policy limits should not include the value of the land. Your agent will be able to assist you in determining the

appropriate amount of insurance for your home.

The limits of insurance on other structures and on the contents of your home are generally expressed as a

significant policy limit to consider is the liability limit. This limit should be high enough to protect you from lawsuits

cost more than one with a $250 deductible. Only you can decide how high a deductible to choose, because only you

loss may not be as high as the limit itself. In this case, your policy covers only the amount of your actual loss. You

must also be prepared to provide proof of what you have lost.

liable, this coverage is limited. An umbrella liability policy adds significant protection for your assets from a variety of

possible liabilities and exposures to lawsuits. An umbrella policy supplements the liability coverage you already have

after the liability insurance in your homeowner's and automobile policy runs out. Umbrella policies are sold with a

When a policy first becomes effective, the insurance company may cancel that policy any time within the first 60

days without providing you with a reason for the cancellation. The cancellation is not effective until at least ten days

after the insurance company mails or delivers a written notice of cancellation to you.

Even if the company does not cancel or nonrenew the policy, depending on your policy, certain coverages may be

or the potential for additional claims, the insurance company will often nonrenew a policy. If an insurance company

pays an insurance claim as a result of the actions of an animal kept on the premises, it may require the animal to be

removed as a condition of continuing insurance. In most cases, if an insurance company is going to nonrenew a

policy, it must provide at least 60 days' notice prior to the nonrenewal date.

premium according to your policy language. However, some companies charge a penalty for canceling prior to

expiration. Companies doing so must provide proper notice regarding this potential penalty. Check with your

days before the policy's expiration date. Some insurance companies may give you six months to one year to make

repairs. If your roof needs replacement because of a storm or other covered loss, the insurance company must pay

for the cost to repair or replace the portion of the roof damaged by the covered loss (minus your deductible). If the

roof is just worn out and there is no covered damage involved, you are responsible for paying to replace it.

required grace period. The premium is due on the date identified on the premium notice. If the premium is not

received by that date and the notice states the policy will be canceled for failure to pay the premium when it is due,

the policy terminates as of the due date. Insurance companies are not required to give you any special treatment

furs, and guns. You will need to read your policy to determine what the limit is. However, most insurance

2. If the initial purchase of flood insurance is made during the 13-month period following the revision or update

look at your credit information without your permission. Insurance companies must also comply with state