Protect Your Investment
With all of the devastation caused by hurricanes and floods, it's natural to wonder if the homeowners affected by disasters had the foresight to carry adequate insurance.
How much do you know about homeowners insurance? With the help of the Insurance Information Institute, we've put together a Q&A on this sometimes confusing subject.
Q: What is covered by a standard homeowner policy?
A: A standard policy includes four essential types of
coverage:
The repair or rebuild of your home if it is damaged or destroyed by fire, hail, lightning or other disaster listed in your policy. Some catastrophes may require a separate policy. Be sure to buy enough insurance to rebuild your home.
The recovery of personal items as a result of theft, fire or other insured disaster. Expensive items like jewelry and furs are included, but you may need to purchase a rider for their appraised value. These belongings are covered off premises, too. The best way to determine if you have enough coverage is to conduct a home inventory and review it regularly.
Liability against lawsuits for bodily injury or property damage caused by you, a family member or your pet. Experts recommend that you purchase at least $300,000 worth of protection or more with an umbrella or excess liability policy for broader coverage.
Costs of living away from home if you can't live there due to damage from a fire, storm or other insured disaster may also be covered. Ask you agent for complete details.
Q: How about insuring a co-op or condo?
A: Your mortgage company requires insurance to protect its investment, but you may need more insurance to cover your personal items, liability or fees that may be charged to you regarding shared areas of the building.
Q: What's a home inventory?
A: Chances are you'd never be able to recall all of your possessions in the event of a fire. Having a home inventory will help you get your insurance claim settled faster, verify losses on your income tax return and help you purchase the correct amount of insurance.
Here are some suggestions:
- Make a list of possessions, including the make and model with receipts and appraisals. Record serial numbers of major appliances and electronics.
- Take a picture of rooms and important individual items. Note what is shown and where you bought it.
- Videotape your belongings by walking through the house and describing its contents.
- Use your PC to make your inventory list. Some software packages include a room-by-room inventory program.
- Store your list, receipts, photos and tapes in a safe deposit box or at a friend's or relative's home.
Q: How can I save money on insurance?
A: Homeowners insurance can vary by hundreds of dollars. Here's how to save money:
- Shop around
- Raise your deductible
- Buy your home and auto policies from the same insurer
- Make you home more disaster-resistant
- Ask about discounts for home security devices and more
- Stay with the same insurer year after year
Source: Insurance Information Institute Web Site
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