Your homeowners' insurance covers your biggest investment. Plus, the liability insurance that comes with it protects the rest of your assets. But most people don't think about insurance until they have a loss and if they don't have enough coverage, by then it's too late.
The right time to think about insurance is once a year, every year. Meet with your insurance agent and review the Coverage Limits page of your policy. This lists the maximum amount the insurer will pay under each type of coverage.
1. Building/Dwelling Coverage. This is the maximum you will receive to completely replace your home--structure, roof, doors, walls, windows, kitchen, bathrooms, heating and cooling systems-everything. Take the cost per square foot for new construction in your area and multiply that by the square footage of your home to arrive at the coverage you need. Ask your insurance agent if you should also have Extended Replacement Coverage and Building Ordinance Upgrade coverage. The value of your land usually doesn't require insurance.
2. Personal Property Coverage. This insures everything in your home--clothes, furniture, electronics, flatware, small appliances, etc. You should have enough coverage to replace it all in the event of a total loss. Special items like good jewelry, artwork, coin collections, etc., might have to be insured on a separate rider to get their full value in the event of a loss.
3. Liability Coverage. Homeowners' insurance normally includes liability protection if someone is injured on your property. The usual coverage is $100,000 or $300,000, which is enough if your net worth is less than that. If your assets are larger, ask about an Umbrella policy to take your coverage to $1 million or more. It won't cost that much more for complete peace of mind.
4. Find out what isn't covered. Things like earthquakes, floods, other special occurrences and business activities are usually not covered in a standard homeowners' policy. Ask your agent if it makes sense to get separate coverage if available.
5. Consider raising your deductibles. In the event of a loss, the deductible is the amount you pay first, out of pocket, before the insurance covers the rest, up to your policy limit. Raising your deductible will lower your premium, but it requires you to pay more if you have a loss.
Taken from the Home and Wealth Newsletter from Kris Tripp
Author:Brandi Rademacher Phone: 253-224-6663 Dated: August 22nd 2011 Views: 4,488 About Brandi: Brandi Rademacher with RE/MAX Realty South is the Professional Realtor who other Realtors come to fo...
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