Top Three Questions to Ask Your Insurer
Yes, it's that time again. Hurricane season is here and now is the best time to start preparing. Make sure to protect your greatest investment, your home. Equating falling home values with a reduction in the amount of insurance protection can leave homeowners dangerously under insured. You should feel confident that you have enough coverage to rebuild and replace personal possessions before it's too late.
Take matters into your own hands. The Insurance Information Institute has the three most important questions to ask your insurer.
1. Do I have enough insurance to rebuild my home?
Your policy needs to cover the cost of rebuilding your home at current construction costs. Quite simply, you should have enough insurance to rebuild your home in the event that it is destroyed. Homeowners who have made upgrades to their home should to alert their insurance company so these improvements are also properly insured.
2. Do I have enough insurance to replace all of my possessions?
Most homeowners insurance policies provide coverage for your personal possessions for approximately 50 percent to 70 percent of the amount of insurance you have on the structure of your home. So if you have $100,000 worth of coverage on the structure of your home, you would be covered for $50,000 to $70,000 worth of the contents of your home, depending on the specific policy.
The best way to determine if this is enough coverage is to conduct a home inventory. A home inventory will detail everything you own and the estimated cost to replace these items if they were to be stolen or destroyed by a disaster. To simplify this task, the I.I.I. offers free, downloadable software and information on how to create and store your inventory at http://www.KnowYourStuff.org/.
You can insure your possessions in two ways: by their actual cash value or their replacement cost. Review these options with your insurer to determine which type of coverage is best for your particular situation.
3. Do I have enough insurance to protect my assets?
Homeowners insurance protects both the structure and contents of your home, and it also provides liability protection to protect your assets and finances. This coverage covers you against lawsuits for bodily injury or property damage that you or your family members cause to other people. It pays for both the cost of defending you in court and court awards-up to the limit of your policy. Most standard home and renters insurance policies will generally provide at least $100,000 of liability coverage.
For more information on how to properly insure your home, go to the I.I.I. Web site at http://www.iii.org.
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