Holding down the fort used to be a matter of muskets and maybe a guard
dog or two. In our modern age, the gun and dog have been replaced by insurance
particularly homeowners insurance. With the increasing need for homeowners
insurance, it is startling to consider that 76 percent of Americans are
improperly insured, according to a study by Marshall and
Swift.
Homeowners need protection against liability (in case someone
is injured on their property) and theft of or damage to their
property.
These are the five most common forms of homeowners
insurance:
• Basic
• Broad
• Special
• Tenants
• Condominium and co-operative
apartments
There are some basic questions you need to answer in deciding
on a homeowners policy that is right for you.
How
much is enough? How much would it cost to rebuild your home if it were
leveled? Typically, if you are insured for 80 percent or more of the cost of
rebuilding, your carrier will pay the total cost of any repair, up to the
limit of your coverage. If not, only a proportionate percentage of the cost
of repairs will be paid. Because of this drawback, you should consider
buying guaranteed replacement, a feature that ensures almost full
reimbursement for repair costs.
Do
you need a guaranteed replacement provision? A guaranteed replacement
provision places responsibility for valuation of your home on the shoulders
of your insurance company. Your insurance company will conduct this
appraisal, make sure your coverage is adequate, and automatically upgrade
your policy as the value of your property increases. Your premium rises
automatically along with this increase.
A
standard policy may cover your homes contents for half the dollar limit
you carry on the house. Unless you buy replacement-value coverage, you will
only be reimbursed for the depreciated value of your furniture and
belongings. With a replacement-value provision, the policy will pay to
replace your lost furniture and belongings with new or equal-quality items
at current market prices. However, unless specified, your policy may not
cover work required to bring the property current with existing building
codes.
Do
you have any additional valuables you need to protect? For an additional
cost, you can add floaters. They are designed to cover specific valuables
such as jewelry, silverware, furs, a valuable collection, or the contents of
your safe-deposit box, up to a certain amount. Additional coverage may also
be desired, such as flood or earthquake insurance, if you live in a
high-risk zone.
Home
is where the heart is. Be sure your home and its contents are
adequately insured.
© 2003 Emerald Publications
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