Back in August, many of us in CT got slammed by Hurricane Irene. Houses floated away at the shore, others took serious hits from fallen trees, flooding was pervasive, and trees toppled like matchsticks.
My property was the victim of multiple fallen trees – down on the ground – on top of each other – resting precariously on power lines – across my driveway – and arranged like pick-up-sticks against each other. My yard looked like a war zone. People drove by, stopped in front of my house, and took pictures.
So, the cleanup began. The insurance company was called. All in all, our house did not sustain damage (which is just incredible). However, it made us pay a little more attention to our homeowners insurance to be sure we were adequately covered for these random weather occurrences.
Many homeowners select a policy, pay each year, and don’t bother to check it frequently to make sure they have the right coverage. I have found that some new home buyers just purchase the cheapest they can get to satisfy the lender requirement.
Having adequate homeowners insurance is an important part of home ownership and protecting your investment.
Here are some things to look out for on your homeowners insurance policy:
Dwelling/Structure – This covers the main building structure, roof, walls, windows, doors, etc. Your house should be insured for the cost to rebuild/replace in case it is destroyed. Don’t overinsure by insuring your home for market value. Insure the house, garage, shed, etc. NOT the land.
Personal Property – Clothing, computers, furniture, etc. Cover your contents for replacement cost not cash value, especially with electronics. You may need a special rider and will have to provide appraisals for items like expensive jewelry and artwork.
Liability and Lawsuit Protection – Homeowners insurance typically covers you if someone gets injured on your property. However, the standard coverage man not be enough. You may have to consider an umbrella policy to increase liability coverage if your net worth is higher than average.
What about deductibles? This is the out-of-pocket cost you pay when a claim is made. The lower the deductible, the higher your insurance premium will be.
How about those hurricanes, forest fires, earthquakes, lightning strikes, floods and any other similar peril? Standard policies may not cover damage from these occurrences.
Be proactive. Read your policy and talk to your insurance professional to make sure you are adequately protected against risk and potential financial disruptions.
Make sure you have the right type of insurance in place and review it annually.
Prepare yourself because once you have a loss and find you are under-insured, it is DEFINITELY too late.
Better safe than sorry!