Hurricane Season always makes me think about my homeowner's insurance policy, so this week I had Andrew Lefebvre from
Nationwide Lefebvre Insurance Agency in studio to give his insight into homeowner's insurance. A recent Zogby poll showed that nearly two thirds of the homeowners polled did not know how much their homes were insured for, that is reflected in information from the insurance software and consulting firm
MSB that shows 68% of homeowners are underinsured by an average of 18%! By knowing what you are and aren't covered for, you can make sure you have the right amount of coverage before it is too late. There are ways to lower your premium such as raising your deductable, improving your credit score, and installing security systems. Here are some good tips to make sure that you have the best coverage possible:
- Get "replacement cost," not "actual cash value." Actual cash value polices will pay what your possessions were worth when they were destroyed, not what they would cost to replace, so you might get $100 for a 10 year old sofa, but it will cost much more to replace at today's prices.
- Loss of Use: It could take a year or more to rebuild your home in the case of a complete loss, make sure your policy will cover at least one year, or even two. In the aftermath of a large scale catastrophe like Katrina, it could be months before you can even get the work started.
- Indemnify high priced items separately: If you have fabulous art or jewelry, you might want to insure them separately, most policies put a cap on those items.
- Umbrella policies: Not just for rich people anymore, Umbrella insurance kicks in when the limits of your home or auto insurance have been exhausted and there are still damages to pay.
This Week's Real Estate Insight: In this economy, so many people are making decisions based on price, but insuring your most valuable asset is not the time to be penny wise and pound foolish. You need the best coverage for the money, not the cheapest premiums. By raising your deductibles, your premiums will cost less and you will be less likely to file small claims which could jeopardize your
CLUE report and result in a cancelled policy. You can then use the savings to add a one or two million dollar umbrella policy and your premiums will stay about the same.
