Chances are you will read or see a report of someone losing their home in a house fire today or tomorrow. In fact according to the National Fire Protection Association, in 2013 there were 369,500 reported house fires, totaling 6.8 Billion dollars in reported losses! For many a fire in their home is the ultimate financial nightmare! To protect your home and property, chances are you are required to carry homeowners insurance on your home? The big questions for you are what is covered by that policy and how much coverage do you have? In order to answer that you need to review this list of the Top Four Things to do before your house burns down*.
Make Sure You Have a Policy
The very first thing you need to make sure of is that you actually have homeowner insurance in place for at least the major insurance perils (Wind, Fire, Theft …) After a fire occurs is no time to find out that someone forgot to make a payment last year. Pull out your most recent copy of your insurance policy and check the inforce policy dates. If you do not have a copy of the policy, now is a good time to call your company or agent.
Make Sure the Amount of Insurance Is Adequate
Now that you know you have a policy, does the policy list enough coverage to replace your home in the event of total or even a partial loss? Inflation not only increases your property values, it also increases the cost of purchasing repair materials along with the labor needed to install it. Because of something called a coinsurance clause, not having enough coverage can complicate even a partial claim and leave you in a big financial hole.
Check the Kind of Coverage You Have
Not only is the amount of coverage important, you must make sure you have the right kind of coverage. For instance, do you know the difference between Replacement Cost Coverage and Actual Cash Value Coverage? It can mean being able to replace a lead crystal heirloom glass with an exact replacement or being given a plastic cup with the explanation that a glass is a glass and a hundred-year old glass is worth almost nothing. Look over the policy language to see what type of coverage you have.
Review Your Policy Endorsements
Like any other products, insurance coverage sold by various companies can contain various types of coverage. Just like buying a car, you can purchase a good one, a better one, or a deluxe policy. The coverage you have comes down to your coverage forms and the endorsements (add-ons) you request. There are many valuable coverages you can add on to a homeowners policy, including water back-up, refrigerated foods, lost key replacement. Talk to your company for a list of the coverages that are available for you, or speak to your local insurance agent.
No one wants to be a victim of a house fire, but if you do, a careful review of your policy before it happens can make all the difference. Review yours for these top four ways to be sure you have the coverage you need.
*This by no means is a complete list of things to verify concerning your homeowner coverage. Consult an independent insurance agent for a thorough review of all your insurance coverages.
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