These tips will change the way you look at insurance.
1. The Standard Policy May Not Cover the Worst Disasters:
Damage from flood or Hurricane (wind) is not covered by a standard home policy. Most agents talk about and offer Hurricane (wind) coverage, but very few mention Flood insurance unless it is required. The majority of flood claims are caused by huge amounts of rain in a short period, not by rivers, lakes, streams, etc. The recent local flooding is an example of this. Without specific flood insurance, your home may be at risk.
2. Your Policy Limits Coverage for Common Losses:
Every policy has sub-limits for theft of personal property. While items like jewelry, guns, money, collectibles, etc. are covered, your policy limits how much can be paid in a claim. It is best to specifically schedule these items.
3. Your Credit Matters:
Nearly all insurance companies use some form of credit scoring to determine your rates. The better your credit rating, the lower your rates are going to be. (See our report on Financial Responsibility for an explanation.)
4. Assess Your Home Insurance Needs Annually:
Things change. So it is important to always consult your agent at least once a year in order to make sure you are adequately covered. For example, any change to your houses such as a new room or an upgrade to your roof brings value to the home which will then cause an increase in the replacement cost.
5. Insure for Replacement Cost:
When you purchase an insurance policy you will be given the option to insure your home and belongings for either replacement cost or actual cash value. It is essential that you choose to insure your home for at least 80 percent of its replacement value. The reason being is that the actual cost value is the amount it would take to repair or replace damage to your home after depreciation.