The recent Earthquake and Hurricane Irene emphasize the importance of having adequate homeowners insurance coverage. JD Power's latest survey of insurance customer satisfaction found nearly one in five homeowners does not have enough insurance to rebuild their home if disaster strikes. It is a good idea to review your policy annually, to determine whether your policy covers the full replacement cost value of your home. Too many people find out too late that they did not have the proper coverage. Here are some things to keep in mind as you assess the damage done to your property and to help mitigate future loss:
- Flood Insurance: Less than 1/5 of U.S. homeowners have a flood insurance policy, although four out of five natural disasters involve flooding. Standard homeowners policies cover damage from wind, and wind-driven rain, but damage from ground water or water seeping into a basement from below isn't covered unless you have flood insurance, available from the National Flood Insurance Program and from a few private insurers. The program has been up in the air for the past few years and presently it is still available, but there is a 30-day waiting period before a flood policy takes effect.
- Hurricane Insurance: Irene is being treated as a tropical storm in Rhode Island for insurance purposes, which should save people money, a hurricane deductible is usually 1 to 5% of the value of the policy, as opposed to a set deductible of $500-$1,000.
- Automobiles: If you have a comprehensive auto insurance policy, you are covered if your car is damaged by flood water. If you are in the market for a used car in the next few months, be careful to check them out carefully. Every year, tens of thousands of cars are damaged by floodwaters and more than half end up back on the road, usually refurbished and shipped to a different part of the country to be sold to unsuspecting buyers. A CARFAX Vehicle History Report will indicate if a vehicle has been registered in at-risk areas during flood and hurricane seasons.
- Tree damage: Standard policies cover damage to a house from a fallen tree, and tree damage to garages, sheds, fences and outdoor pools. Comprehensive auto insurance will cover damage to a car. When a tree in your yard falls onto a neighbor's property, the neighbor's policy will cover it but you could be liable if you knew the tree was in bad shape and you didn't do anything about it.
- Avoid Scams: Rhode Island Attorney General Peter Kilmartin warns people to be on the lookout for potential scammers. Check with DBR at (401) 222-1268 to make sure that a contractor is properly licensed and registered. If you believe you are a victim of fraud or price gouging, contact the AG's Consumer Protection Unit: download a consumer complaint form athttp://www.riag.ri.gov/civil/consumer/, call (401) 274-4400 oremail contactus@riag.ri.gov
- Low Cost loans available: Many banks are offering special low cost loans for victims of Irene to help customers make repairs, or as bridge loans until an insurance check comes through, most of these offers expire at the end of September.
- If you are under Contract now: Many lenders require appraisers re-inspect homes under agreement after major storms, so if you are in contract , you might be hearing from your lender about having your home re-inspected as a contingency on your financing.
This week's Real Estate Insight: Read your insurance documents and review your existing coverage annually. Know your policy numbers, and where to call to file a claim. Websites are great but you will almost always get the best results when talking to a customer rep in person, so call your insurance company with any questions. If you don't have a copy of your policy, be sure to check it online before the storm hits - you may not have power for a while after the storm. And don't wait too long to get a new or expanded policy in place, it might be to late when disaster strikes.
