To make sure you have the right type, and right amount of homeowner’s insurance, you need to understand what it does, and doesn’t, cover. Regular homeowner’s insurance will cover damage from tornadoes, fires, and burglary; but it will not cover the calamity of hurricanes, floods, terrorism, or nuclear meltdowns.
*Make sure to get enough coverage to re-build your home from bottom to top.
*Choose “replacement cost” instead of “actual cash value.”
*Regularly inventory your possessions and their replacement costs. Consider a special rider for valuables such as jewelry, furs, and family heirlooms.
*Understand “loss of use” provisions. These provisions will dictate how long your insurer will pay rent while your home is rebuilt or repaired.
*Look at on-line quotes and shop around, in general. Do some research to make sure the company is financially sound.
*Consider the possibility of raising your deductible to keep rates low.
*Get discounts by purchasing homeowner’s and auto insurance from the same company.
*Consider an umbrella policy to protect against lawsuits.
*Ask if special discounts are available. Some companies offer discounts to longtime customers, seniors, and non-smokers.
*Monitor and maintain a good credit score
*Unless you plan to file a claim, don’t report damages.
What Isn’t Covered
*Home office equipment
* Damage from neglect and poor maintenance practices
*Losses caused by pests such as insects, rodents, and pets
*Sewer backups and mold
In Case of Disaster
*Get in touch with your insurance company as soon as possible.
*Begin checking for damage and take photos to document calamity. Make quick fixes and temporary repairs to mitigate further damage.
*Be cautious of repairmen charging exorbitant rates and con artists impersonating insurance adjusters.
*Read the fine print before signing anything! Be careful not to sign away future compensation upon receipt of the first check.
*If a settlement offer is clearly unfair, don’t accept it.
Learning a few simple principles in advance can save you a bundle, should disaster strike. Speak with your insurance agent to gain a better understanding of your homeowner’s insurance needs.