The Top Ten Things You Need To Know About Homeowners Insurance

1. Buy the right insurance for you. "You should cognize what you have, and you should cognize ahead of clip that you are covered," states Jeanne Salvatore, frailty president for consumer personal business with the Insurance Information Institute, a non-profit-making industry trade group. She urges looking at your insurance coverage in four key areas: the construction of your house, your belongings, your liability to others and your life disbursals if you're forced out. "If there's a disaster, you desire to be able to reconstruct your house and replace everything in it. And you need enough liability coverage to protect you in lawsuit you make get sued." Living disbursals would cover the cost of making the house livable or life elsewhere while your home is being repaired or rebuilt.

2. Get substitution value insurance. Face it, this is an insurance policy, not a garage sale. You don't really care how much your ownerships would bring on the unfastened market, the so-called "cash value" or "fair market value." You desire to be able to replace everything you lost with similar, new items. And do certain that your policy spells out that both your home and its table of contents are covered by replacement-value insurance.

When it come ups to replacing the house itself, expression for drawn-out or guaranteed-replacement-value coverage. Guaranteed replacement, which covers rebuilding no matter what the cost, is not offered much any more, states Don Griffin, helper frailty president of commercial lines for the Property Casualty Insurers Association of America (PCI). Many companies offer extended-replacement-value insurance, which will cover up to 100 percent of the value of the home, plus a certain percentage to cover rebuilding the home in today's market.

3. Understand the claims procedure thoroughly. Two policies can assure the same amount of coverage, but they can be vastly different when it come ups to covering you and your household after a loss. Rich Person your insurance agent explicate exactly how claims are handled, especially when it come ups to authorship you a check. Bash you have your full claim upfront, or just a fraction? Bashes the company wage you for all the things you've lost, or only those things that you replace?

Some policies will give you the cash value of your ownerships right after a loss, but wait to cover the substitution value until after you've replaced your points -- and have got the gross to turn out it. This could be a problem if you're wiped out and have got no cash reserves.

Equally of import is the timetable on replacement. If you travel from life in a five-bedroom home to sleeping in a motor hotel room with four children and a dog, you might not desire to travel on a shopping fling right away. How long make you have got to replace your things?

4. Take a thorough and accurate inventory. Filing a claim affects two stairway -- proving you owned certain points and collateral their worth. This is a batch easier to make when you still have got your things. Go through your full home with a picture photographic camera (rent 1 if you don't already have got one.) Walk through each room, make a quick expanse and get everything you have on tape. Don't forget the attic, basement, cupboards and offsite storage locker, if you have got one. Or take the low-tech method: do a listing and shoot a few axial rotations of film. Hoard your picture or photographs in a safety sedimentation box with a transcript of your policy. If you maintain your stock list at home, do a second transcript to give to a friend or maintain at the office.

5. Buy floaters. Many times, homeowners insurance and renter's insurance policies bounds the amount you can accumulate on some big-ticket items -- usually things like computing machine equipment, jewelry, pelts and mulct collectables -- to a fraction of the substitution value. If this is the case, you need to pick up a particular policy known as a "floater" or "endorsement" for each of those items. A musca volitans will also reimburse you if you simply lose the article. In the lawsuit of something new, salvage the measure of sale with your inventory, and facsimile a transcript to your insurance agent. If the point is older, have got an assessment done. Again, salvage one transcript and direct another to your agent. That way, you'll never have got to worry about proving you owned an item, and there will never be a difference over what it's really worth.

6. Keep gait with inflation. This is especially of import with a homeowners insurance policy. It may have got cost you $100,000 to construct your home 10 old age ago, but it might cost $120,000 to replace it today. "Many insurance companies have got rising prices guard, which covers the increasing cost of rebuilding," Salvatore says. When your policy come ups up for renewal, talking to your agent to verify that your coverage amounts are still realistic. And when you do an improvement, add it to the total.

7. If you have a condominium or co-op, protect your property. Brand certain that the condominium board or association have a policy that screens the common areas, and get a copy. Also look at the association bylaws to happen out what parts of the home you must cover. "It's usually from the drywall in," Gryphon says.

Since condominium proprietors need their table of contents policy to cover things like cabinets and fixtures, they need a spot more insurance than the typical renter. Sometimes you get a terms interruption if you travel with the same company that wrote the policy for the condominium association.

"Plus they are familiar with what they cover, so they cognize what to sell you," Gryphon says.

You also may desire to see appraisal coverage. If the condominium association's policy is not large adequate to cover a loss, or if there is a brawny deductible, the association will divide the further costs among the members in the word form of an assessment. With appraisal coverage, your insurance company pays the tab.

8. See inundation and temblor insurance. Granted, this is not for everyone. But if you dwell in an country prostrate to inundations or earthquakes, it pays to cognize that most property policies make not cover these disasters. Some independent carriers offer both. For inundation insurance, you can also reach the National Flood Insurance Program. In California, you can get temblor insurance through the California Earthquake Authority.

9. Think about purchasing an umbrella policy. Liability insurance, which picks up the check if person gets ache on your property or through the actions of your household members, tops out at $300,000 on most homeowners insurance policies, according to Griffin. "But cipher Sues for $300,000," he says. "That usually begins at $1 million." His recommendation: if you have got assets, choice up an umbrella policy that would add extra liability coverage to your home and auto policy. "Umbrellas are cheap -- usually starting at about $200 to $350 a year."

10. After a life-changing event, phone call your agent. Getting married or divorced? Are the children moving out -- or back in? The amount of insurance you need -- and the points you desire to cover -- change over the years. Be certain you maintain your policies and stock lists up to date.