Insuring Your Home Properly

Most people don’t give their homeowners insurance much thought unless they are writing the check for the premium, of if a disaster of theft occurs, So every year about this time as we head into the last few weeks of hurricane season, I like to spend some time with Andrew Lefebvre, from Nationwide Insurance to give us some tips on properly insuring our homes. Studies by the insurance industry find that more than half of US Homes are underinsured by an average 22% that means that many people are at risk should a disaster happen. You might be thinking that since your home has gone down in value, that you do not need to worry about that, but the cost of oil has made construction costs climb high. It is important to make note of any improvements you have made so that you can adjust your coverage as well.   You might be thinking about shopping around to save money, but that could end up costing you more, since most Insurance companies offer a loyalty discount of 5% per year. Basically there are two types of coverage, Actual cost value and replacement cost. Both include content and related structures, Actual cost value costs less and basically pay “as is” minus depreciation. Replacement cost is of a like kind and quality, Nationwide even takes it a step further with replacement cost plus which gives you even more coverage for a slightly higher premium. Your premiums are based on your claims history, and some insurers also factor in your credit score, so it is a good idea to pull your credit report and check your claim history at https://personalreports.lexisnexis.com/ Check to make sure all the information is correct. Switching carriers might seem like a good idea, but since most insurance companies offer a loyalty discount, you might not end up saving money. Raising your deductable to at least $1,000 can save you 15-30% and will help discourage filing soft claims that seem innocent but end up costing you more in the long run too. If you do not already do so, think about getting your automobile insurance from the same company as well. This Week’s Real Estate Insight: Despite being downgraded to a tropical storm, the estimated dollar amount for damage caused by Hurricane Isaac is up to 1.5 billion dollars or more once off shore damage is factored in. Be proactive and review your homeowners insurance and make sure you are adequately covered in case of a disaster.