Knowing what your homeowners insurance covers before disaster strikes can save you and your family a great deal of stress. Do you know what your insurance policy covers, what it doesn’t cover? There are eight things everyone can do to make sure they have peace of mind and full homeowner’s protection before anything happens.
1. Get an accurate inventory of all your belongings. Should anything happen, it is important that you have a record to prove the things you own and that their worth is verified. It is always a lot easier to take a good inventory while you still have all your possessions. One of the easiest ways to do this is to get a video inventory on record.
Go through your home with a video camera, going through each room making sure to get everything owned on record. Remember to also get the basement, attic, any closets as well as any storage units you may own located elsewhere. If you don’t have a video camera or have no means to rent or borrow one, then make a list of all your items and take pictures of them.
Make sure to keep the video or written inventory in a safe place. The optimal choice would be a water and fire resistance safe-deposit box that contains your policy and other important papers with your inventory list.
2. Understand how the claims process works. Even though two policies promise the same amount of coverage, they can be largely different after a disaster once it comes to helping you recover your losses. Your agent should be available and willing to explain exactly how the claims process is handled, this is especially important when it comes to the claim payment process. Find out whether or not you will get the entire claim directly or a percentage.
One policy will give the cash value of your possessions immediately after the loss, while another may wait until after you replaced the property/items and require receipts to prove the replacement value after the fact. Generally, that can be a huge problem for families that have no savings or cash reserves at hand. Knowing the timetable on replacing your lost items is also imperative to know before disaster hits.
3. Purchase floater Insurance. Homeowners and renter’s policies many times will limit the amount that can be collected on what they consider ‘big ticket items’. They’re common items like jewelry, computer devices, fine or antique collectibles, and furs. Most policies cover only a fraction of the replacement value on these types of items, so picking up a special insurance policy known as ‘endorsement’ or ‘floater’ for those items is important.
The floater/endorsement will compensate you most times even if you just lose the item. Keep all bill of sales with your inventory and if it’s an item you may have had for a while, make sure to get it appraised.
4. Keep all your information up to date! If you get married, divorced or your children move out this can change a number of homeowners insurance you may need. It can also change some of the items you will want to cover.
If your children move out you won’t need to cover the things they may take with them or vice versa, if they are moving in and bringing possessions you may want to add them. Keep inventory and policy information current.
5. Retain pace with the rate of inflation. Although you paid $100,000 to build your house 10 years ago, to replace it today in all probability will cost you, at least, $150,000 if you had to rebuild today.
Some insurance companies have what they call ‘inflation guard’ that will cover the rising cost of rebuilding a home, but some do not. It is important to talk to your agent to find out if your policy covers this. Florida home insurance quotes online are simple and efficient for obtaining the most competitive rates.
6. Think about an earthquake and/or flood insurance. Most property insurance policies don’t typically cover these, but depending on where you live it’s a good to consider.
There are a few independent insurance carriers who do offer both flood and earthquake insurance. If you live in California, you can contact California’s Earthquake Authority to get earthquake insurance. If you live in an area where flooding is a potential, contact the National Flood Insurance Program.
7. For co-op or condo owners, make sure to protect your property. Ensure the condo association or board has some kind of policy that covers common areas. Check out the “association” bylaws to learn what parts of the home you are responsible for covering.
If you own a condo you will need your contents policy to cover stuff like fixtures and cabinets, a good thing to remember is you will need a little more insurance than a typical ‘renter’. Consider assessment coverage, especially beneficial if the condo assoc.’s policy isn’t big enough to cover a loss or if they have a huge deductible.
8. An Umbrella policy for a ‘rainy day’. Umbrella policies are basically liability insurance that will protect you should anyone get hurt on your property or because of the actions of a family member.