For most people, their home is their most valuable asset. Besides the value of the home itself, it’s filled with a lifetime of memories and amost all of your personal belongings. If the unthinkable happens, do you have enough homeowner’s insurance to cover your losses in case of fire, theft, tornado, hurricane, or some other disaster?
Chances are that you have a homeowner’s insurance policy. It could be that you feel safe and sure that your losses would be covered. You could, however, be experiencing a false sense of security. How old is your policy? When was it updated? Are you paying too much?
Below are some steps to take to ensure both your peace of mind and your future:
* Take an inventory of all your possessions, including furniture, antiques, works of art, appliances, rugs, siver, china, jewelry, firearms, and collectibles. Even items like shoes and clothing will have to replaced in the event of a total loss, so they can really add up.
* Have a friend or family member help you with the inventory to decrease the chance of overlooking something. Don’t forget items like tools that might be kept in an outside building or shed.
* Assign a value to each item, using the amount of money it would cause to replace them. That leather chair you purchased on sale two years ago will cost more to replace than it’s present value.
* Figure the total cost of replacement for all your belongings.
* Have an expert assess the current value of your house. It might be worth much more now than when you initially purchased homeowner’s insurance, especially if you’ve done improvements or additions.
* Add the price of the house and the cost for replacing your personal belongings. This is the minimum amount of homeowner’s insurance you need.
* Compare your total to the amount covered under your present policy. Do you have enough coverage?
* Ask about accident coverage with your policy. Do you need extra protection? If you have a swimming pool, playground equipment, a trampoline, a dog, or anything else that might be conducive to accidents or injurues, make sure you’re covered. One big lawsuit could spell financial disaster for you and your family.
* If you find your present policy is lacking, get a homeowner’s insurance quote from your present carrier. Then shop around. Get quotes from other insurance companies and compare prices.
* When comparing companies and policies, be sure to check for any exclusions. For example, most typical homeowner’s insurance policies do not cover damage done by floods. If you live in an area prone to flooding, you’ll probably need a separate policy to include flood damage.
* When comparing prices, don’t forget to take deductible amounts into consideration. You’ll most likely get a lower homeowner’s insurance quote if you agree to a higher deductible, the amount you pay out-of-pocket before the insurance company pays.
* Deal only with reputable insurance companies, ones with proven track records. Sit down with an agent and explain your coverage plans to him. Don’t be afraid to ask questions and demand explanations. That’s part of his job.