A standard homeowner's 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 called "all-risk"
policies, but there are some potentially disastrous risks that they
don't typically cover: 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.
