Five Things You Should Know about Homeowner's Insurance

More than half of homes are under-insured

Whether it's due to rising construction costs, underestimating the value of a home, neglecting to itemize expensive possessions, or just shopping for the lowest premium, many homeowners find themselves without enough insurance to cover a catastrophic loss. Unfortunately, most of those folks find out only after a loss occurs.

TIP: Take sufficient time to discuss your home and coverage with your agent. Sharing relevant details, like valuable articles that you own (jewelry, artwork, antiques, musical instruments), additions to the original structure, even the kind of floor coverings you have, can help you and your agent to get the right amount of coverage that you need.

Homeowner's insurance can cover a lot more than your house

Here are a few good examples:

  • Coverage for valuable items that are lost.
  • Coverage for items stolen from you while you are traveling
  • Coverage for grave markers
  • Coverage for a home-based business
  • Coverage that provides for repair of major systems and appliances

TIP: Every insurer offers different options that add value to your homeowner's policy. An independent agent can tell you the options offered by several different carriers, saving you time and helping you to get the right coverage for your needs.

Your homeowner's policy can help you recover from identity theft

Today's web-savvy consumer is exposed to more conveniences — and more vulnerabilities — than ever. A compromised bank account or credit card can be financially devastating, and the recovery process is often frustrating and time consuming. Your insurance policy can add an extra layer of protection at a low cost.

TIP: Ask your agent what kind of identity theft protection their carriers can offer. In some cases, coverage can include reimbursement for time off work to re-establish your accounts, as well as access to a case manager to guide you through the process.

Have a basement? Sump pump backup is not covered automatically!

Most insurance policies have options to add coverage against a sump pump backup, but don't include them by default. The worst time to find this out is when you have six inches of water in your basement!

TIP: Review your policy with your agent to determine what coverage you have. If you're shopping for insurance, make sure that coverage for water backups in your basement is specifically mentioned if you need it.

"Replacement Cost" coverage can provide a larger reimbursement in case of a claim

Most policies are written with actual cash value coverage as the default. This means that if items need to be replaced as a result of a covered loss, you will be reimbursed at a depreciated value (like for an automobile claim). Therefore, the amount of your insurance settlement may be a lot less than it would cost to replace your items with new one.

TIP: Ask your agent if you have replacement cost coverage. If you don't, you'll pay more to get it, but that cost may save you from an unpleasant surprise in the event of a claim.