HOME OWNERS' INSURANCE . . .
A FEW OF THE DETAILS
Too little attention is often given to a homeowner's insurance coverage.
Merely having insurance simply isn't enough. Having the right coverage with the
right amounts could be critical should a disaster ever occur.
Consumers will sometimes compromise their coverage to save money. Such a
decision could result in the loss of many dollars if one had to make a claim.
There are two recommendations that are too often ignored. First, policy
limits and the value of possessions should be compared at least every year.
Make certain that the policy reflects any major purchases or additions to your
home. Secondly, create an inventory of both the construction elements of your
home and its contents. Photographs, video tapes as well as written records can
be important in the event of a disaster. Include a brief description of each
item including the brand, model, serial number, purchase price and date of
purchase. Be sure to give thought to where you will keep the records that you
create. Obviously, you do not want to retain this information at home where it
could be stolen, damaged or destroyed in some disaster.
Many people consider themselves insurance poor. It is important to consider
ways to reduce the cost of insurance without putting your home or property at
risk. One of the easiest ways to reduce insurance costs is by adjusting the
deductible. The deductible is the amount the homeowner is required to pay out
of pocket before the insurance company begins to pay. The
lower the deductible, the higher the premium. You may be surprised at
the considerable savings via increasing the deductible amount from $250 to $500
or even a $1000. Be sure that you will be able to pay the deductible amount
should you increase it to save on the premium payment.
Not too many years ago, lenders required a borrower to insure the property
up to the amount of the mortgage. This often resulted in insurance coverage in
excess of the "improved portion" of the property. Insurance companies
today automatically provide a "guaranteed replacement cost" policy,
the broadest coverage available, which covers the entire cost of rebuilding
(less any applicable deductibles) even if the cost exceeds the policy limits.
It is probably worth the extra premium to make sure your policy will cover any
extra costs of bringing a building into compliance with contemporary building
codes should that be required following a disaster.
Ask your insurance agent about other ways to reduce insurance costs. Does
your home have an alarm system, dead bolt locks, fire
extinguishers? Check to see if these will result in a discount.
Many insurance companies will provide a fairly significant discount if they
insure both your home and auto(s). Others will reward you for upgrading the
plumbing or electrical systems. Other possible savings can result if you are
buying a new home, have been insured with the same company for 3-5 years, are a
senior citizen or a non smoker.
Earthquake and flood insurance are generally extra coverage. If you are in a
designated flood area, a lender will typically require flood insurance
coverage. Such insurance can be fairly expensive and usually is not acquired
unless required by the lender. If you live in an area where earthquakes are
frequent, you may want to investigate earthquake coverage. It, too, is
expensive and carries a very high deductible.
You need to consult with your insurance agent to determine what is best for
you.
Finally, should disaster strike, take care of yourself, your family and your
pets. Be ready with a disaster plan and practice it regularly with your
children. Never risk your life to save personal property. Do your homework and
then rely upon having adequate insurance coverage to recoup your loss.
Web Page/Insurance