Over the year in the insurance industry, I have seen it all and have seen many changes except for one. You have on one side the insurance carriers (companies), and on the other had the customers. Now insurance companies make changes, have been making changes and will always make changes to make sure they stay profitable, customers knowledge of their insurance and policy stay the same.
When it comes to your insurance, as a customer, what you don't know CAN hurt you , and it can hurt you badly.
One of our missions i to educate our customers, so here you go!
Top 5 Things You Need To Know About Homeowners Insurance
1. Guaranteed Replacement Cost Coverage
Many homeowners make the mistake of not insuring their home for the cost of home replacement. Insuring to the market value of your home may seem reasonable; however, it may actually cost more than your home’s current market value to rebuild the same home. The cost of building and supplies generally increases over time and those costs may further spike in the event of widespread damage. With guaranteed replacement cost coverage, the insurer will pay to rebuild your home—regardless of cost. You deserve to have peace of mind, knowing that in the event of a disaster, you can have your house back. Make sure that you consult with your insurance professional about guaranteed replacement cost coverage.
2. Taking Inventory
If you don’t take an accurate and detailed inventory of your personal possessions, in the event of a loss, you could wind up with a lousy recovery. We recommend you take a detailed inventory, including pictures and/or video, and that the inventory be stored remotely or in a fire-safe box or preferable a secure cloud account. Special items such as jewelry, collectibles, and guns may be able to be added to your homeowners insurance policy with an endorsement and/or rider. Jewelry, for instance, without a separate rider, may only be covered for up to $1000 per item and up to a total of $2500 per incident.
A neat little tidbit about homeowners insurance is that the loss of your covered items may not necessarily have to be limited to a loss at home. If your engagement ring was covered under your homeowners insurance policy and you lost it while honeymooning in Europe, you still will probably be able to make a claim for the ring’s value.
3. Inquire About Water Backup Coverage
Just because you have flood insurance (which is separate policy from homeowners policy), it doesn’t mean you’ll be covered if your house floods. A few weeks ago we touched on federal flood insurance through FEMA, but that flood insurance doesn’t typically cover flooding from sewage backup, or when groundwater seeps in through your walls. To be covered for these types of flooding, you usually need a separate water backup endorsement. These endorsements are not very expensive so we strongly recommend you look into it, you'll thank yourself and us if ever that day comes and need to use it.
4. Don’t Skimp on Liability Insurance (Especially if You Have Kids and/or Dogs)
If someone gets injured in your home or on your premises, you could be looking at a lawsuit. Dog bites, kids falling out of trees, and slips on icy driveways are just a few potential home hazards and bank account decimators. We strongly recommend you speak with your financial planner to discuss how much coverage is necessary to protect your personal assets in the event of an accident, also consider getting an umbrella policy, it can be a an assets saver in case of a major accident and it is extremely cheap compared to how much it covers.
5. Don’t file a Claim Simply Because You Can
Before you make a claim on your homeowners insurance policy, make sure that you’re not winning the battle and losing the war. Many people have started using their homeowners insurance policies more as home maintenance policies. These people make many small claims on their policies for the simple upkeep of their homes. Many of these people are hurting themselves in the long run. Claim-happy individuals will be impacted not only with yearly rate hikes, but also may find it difficult to find affordable insurance in the future.
Contrary to what you might think, it is the number of claims made, not the amount of your claims that most significantly impacts your rates. Many small claims will hurt you more than a single, large claim. If you’re thinking of making a claim, choose—but choose wisely. Companies will normally take a look at your five-year track record of homeowners insurance claims when setting premiums.
I hope this article has been of some value to you, I should probably add that EarthQuake Insurance is also not included in the homeowners policy.
If you need help with your insurance, reviewing and understanding you policy/coverage, feel free to contact us, we'll review your policy(ies), explain your coverage absolutely free.