Are You Insured Or Do You Just Have Insurance? | Part 1

Part 1

Are You Insured Or Do You Just Have Insurance?

Thanks to technology today, a computer can now be carried around in your pants pocket. We are being more efficient than effective with this technology and in the insurance world we are being given more choices today than ever before.

So how do we know what is best for our situation? The answer, we do not know. Only our local property/casualty agent who has been trained can give us that sound advice. Every year your agent should review your policy for new discounts, replacement cost calculator and endorsements. By doing so, they are protecting your checkbook and your family’s lifestyle. In the event you do not speak with or do not know who your insurance agent is, the following are some tips when purchasing a homeowners insurance policy.

Top Priority: Be sure your home is insured for the total REPLACEMENT cost.

Since your insurance company offers coverage to repair damage to your home, the proper coverage amount is based on the cost to rebuild the home. It is NOT based on the market value of the home. Building costs are going up as other commodities such as gasoline go up – that’s how building supplies are delivered. Your local agent can help you calculate the sufficient amount of coverage needed to rebuild your home. You don’t want to be caught short of coverage in the event of a total loss. The Insurance Information Institute offers many tips on properly estimating the right amount of insurance, and what policies to buy. Check out www.iii.org

Priority #2: The top two causes of loss are Fire and Water damage.

Four areas of the home that are most prevalent in suffering covered losses are the kitchens (fires), roofs (water and wind), basements and bathrooms (water damage due to burst pipes). Check with your local agent to be sure your Homeowners policy covers these perils. Virtually all policies cover fire (but not arson), but water damage coverage may vary. Most policies cover water damage from “wind driven rain” striking the home, coming through your roof, or coming in through windows. However, rising surface water, even if caused by rain, is not covered. But you can protect yourself in two ways for these perils. Most companies will offer an extra coverage rider (for more premium) that will cover water back-up from pipes or drains on your residence premises However, this does NOT cover rising ground water, such as from a result of heavy rains, flooding streams or causing ground water seep up from the earth. The National Flood Insurance Program (NFIP) does offer a policy to cover rising surface water, such as described above. Many local insurance agents can get a flood policy for you. Check out www.fema.gov/business/nfip/.