How Well Do You Know Your Homeowners Insurance? Tips for a Well-insured New Year!
As the New Year approaches, everyone starts talking about resolutions and those other little housekeeping tasks that we always mean to get to, but somehow never do. No, we’re not talking about spring cleaning – though that will be looming before you know it, too – instead, we’re talking about another homeowner responsibility that often can be overlooked… familiarizing yourself with your homeowners insurance policy. If you own a home, you’ve got a homeowners insurance policy. After all, you wouldn’t have been able to secure a mortgage without one. But, do you have any idea what your homeowners insurance policy even covers? Let the New Year be a new opportunity to understand your homeowners insurance. To start, your homeowners insurance policy covers the physical structure of your home and your personal belongings. Typical policies protect your home and belongings from a number of disasters that may include, but may not be limited to: fire, windstorms, hail, riots, explosions and theft. Homeowners insurance policies also protect against water damage, except those water damages that result from flooding, as those must be covered by a separate, more-specific policy. Those homeowners who live in a flood plain would carry this type of additional coverage. In the event that any natural or man-made disaster covered under your homeowners insurance policy occurs, your policy should cover the cost of living elsewhere while your home is being repaired or rebuilt. When it comes to the personal belongings that are covered in your homeowners insurance policy, you should also familiarize yourself with the process for recouping any losses you may incur. It may be hard for you to place a value on your personal items, but you can bet that your insurance provider quickly will do just that. So, your five-year-old flat screen may not be as valuable to your insurer as it is to you. If you want your policy to cover the cost of a new version of your possessions, you’ll need to make sure that your policy includes replacement value insurance. And, when you’ve got that replacement value insurance, how do you use it? Some insurance companies may require homeowners to purchase a new item first and turn in a receipt before being reimbursed. If that’s the case with your policy, you should find out how long you have to do that necessary legwork and paperwork. So, that’s you and your belongings… they’re taken care of under your homeowners insurance policy. But, typically, there’s more. Your homeowners insurance policy also covers your legal liability if you, a family member, pet or other person gets hurt on your property. This liability coverage also includes contractors that may come to work on your home. Now, let it be clear that the coverage we’ve referred to above is what is included in a typical homeowners insurance policy. The amount of all of this coverage is up to each individual policy holder. So, here are a few insurance tips for all homeowners as the New Year approaches: Review your current homeowners insurance policy. The first step is familiarizing yourself with the kinds and amounts of coverage that you currently have. Then, you’ll know where you may or may not want to make changes. Ensure your homeowners insurance policy covers the amount it would cost to rebuild and refurnish your exact home in the exact spot if you ever suffered a total loss. When you’re trying to determine this amount, don’t focus on the price you initially paid for your home. Take current market value into account, along with current construction and building material costs. And, don’t forget to include all of your personal belongings in that lump sum figure either. Take a close look at your deductible. Like other insurance policies, with homeowners insurance, the higher your deductible is, the lower your annual premium will be. But, consider what would happen in the case of a disaster or other home emergency. Would you be able to afford your deductible all at once? Homeowners insurance is one of those things that everyone has, but hopes they never have to use. Instead of finding out what your insurance is when you need it most, take charge in 2016, learn what your policy includes and adjust it to meet your needs. Here’s to a well-informed, well-insured New Year!
