Update Your Homeowner's Insurance

The goal of buyers is to get to the closing and purchase the house.  Once that goal is accomplished, insurance and other protections in case of disaster tend to go by the wayside.  Some home owners purchase just enough insurance to satisfy the mortgage company and don't seriously discuss what coverage is best for their individual circumstances.  IF a disaster strikes, however, it's best to be prepared.

A periodic meeting with your agent to discuss your coverage can be important.  When the sewer backed up in our custom built home, it never occurred to me that the insurance might not cover the damage because it was a "flood".  One has to have special coverage for "flood" insurance!  Luckily the City took the responsibility and our losses were covered through their insurance because it was their lift station which malfunctioned.

Some things to ask your agent:

• What "acts of God" are, or are not, covered.
• Is your house covered for replacement value and what does "replacement value" entail?  If you live in an 1884 Victorian will the fancy woodwork, stained glass windows, antique lights be replaced with like antiques or will they be replaced with modern substitutes?
• If your home is burglarized, what is the process to file a claim?  Do you have to have proof of ownership in the form of receipts, appraisals of jewelry, pictures, inventory?  We found this process out the hard way and had to find proofs of ownership for gold necklaces, diamond engagement ring, camera, stereo equipment, and cash!  He bought me the ring 35 years ago.  Who has receipts after that long?  We had to find a picture which was really difficult!
• Do you need a separate policy for some items?  Aunt Agnes' antique armoire, fur coats, recreational vehicles or jewelry all may require a separate policy.
• What is the process when there is damage to the house itself?  Do you get contractor bids or does the insurance company send an adjuster (who by the way works for the insurance company!).  Sometimes hiring a public adjuster will benefit you, the homeowner.  Does payment for the repairs come to you, to the contractor directly, or to you and the mortgage company?
• What is your liability coverage as a homeowner and what scenarios are you liable for?  If a delivery person falls on your front steps, who is responsible?  What about children who come to visit?
• Check on pet coverage.  Is your Doberman or Rottie an issue?  What about the 6 foot long boa constrictor?   Do you need extra coverage?
• If you have a swimming pool, what are the insurance requirements?
• Does your coverage have an inflation or appreciation clause to cover the home's future value?
• Ask what the criteria is for insurance being cancelled.  Some companies allow only so many claims and then they drop your insurance.
• Are there discounts for being near a fire hydrant, fire station, having newer wiring, roof, furnace or other mechanicals.
• Is a fireplace an issue?

This is by no means a complete list.  Every homeowner's personal situation is different, but each needs to determine that they have the best coverage for their circumstances.  If you shop prices make sure you're comparing apples to apples.  One company's coverage may look cheaper but the coverage may be lacking some of the coverage that a higher priced bid has.  Also, check on the claims service.  Ask for references.  See if the company pays for what they cover when needed!

Comments

[teresa boardman]

Nice post. We had to update ours a couple of years ago because of the steep increase in prices in our neighborhood. We don't but we should probably review all of our insurance policies on an annual basis.

[Andrew Howe]

All true. Condo owners also need check-ups and a check of their coverage for inside of the unit vs the condo association's coverage on the building itself.
Andy