Whether you just purchased your Glenview home with the help of The Marla Schneider Team or have been in your home for years, it's important to periodically make sure your homeowners insurance coverage is accurate. Don't rely on your insurance company to size up what you need. To avoid falling short in coverage before an emergency happens, you need to take charge of your own fate by making sure you're properly covered.
Normally, you may be apprehensive that your insurance company or agent is pushing you to over-insure your home. Surprisingly, however, they may not help as much as you'd like or unknowingly steer you wrong. You may be interested to know that, according to a survey by insurance-services firm MSB, nationwide 68% of homeowners are underinsured by an average of 18%.
That means someone whose house would cost $200,000 to replace would find herself short by $36,000.
Be prepared to do some research and don't be afraid to speak up and be assertive in the coverage that you'd like.
Don't skimp: You want the best coverage for your money. This isn't the place for just looking at the lowest possible premiums. Make that clear with your agent from the start.
Be ready with disaster coverage: Ask your agent for special coverage that isn't covered by your homeowners. This may include earthquake and tornado coverage and may need to be added separately to your policy.
"Loss of Use" Coverage: Homeowner policies generally provide money to pay your rent and related living expenses in the event that your home needs to be rebuilt. This coverage should be on the declarations page and the amount offered should cover you for a two-year period at least.
"Replacement Cost" vs "Actual Cash Value": Many policies severely restrict how much money you would receive to replace your things. Some even exclude certain common household items from your policy. Actual cash value on your home's contents means that you would get a check for what these possessions were worth when they were destroyed instead of the cost to replace them.
Replacement cost coverage will be more to your benefit. Typically, you'd get a first check for the depreciated value of your items, but after replacing them and providing receipts, you would get a second check for the remaining expense.
This doesn't come without cost though. The cost of replacement coverage is about 10% to 20% more than actual-cash-value coverage. However, read your policy thoroughly to make sure there aren't any exceptions.
Give your treasures their own insurance: Most policies have payout limits on jewelry, artwork, antiques and firearms. For your treasures, if you want full coverage, you will need to purchase a "floater" or "rider" on these items at an additional cost.
Liability Coverage: This is an underestimated coverage and one that is tough in choosing just how much to buy. This means you could be in danger of losing everything you own if someone decides to sue you. Steve Vidmar, an insurance defense attorney in New Mexico, recommends that most homeowners have at least $1 million in coverage. That means buying the maximum coverage your policy allows -- typically $250,000 to $500,000 -- plus an "umbrella" or personal-liability policy that provides coverage up to $1 million. "I'd recommend even higher limits," Vidmar said, "for those with teenage drivers."
Fortunately, increasing liability coverage on your Glenview home is still relatively cheap. A $1 million umbrella policy usually costs $200 to $300 a year. That's between $16-$25 a month and well worth the investment.
Revisit your Policy Frequently: Homeowners often forget to report renovations to their insurers or assume that their coverage is keeping up with inflation and replacement costs. This isn't necessarily true, so for these reasons, take the time to revisit at least once a year to add anything needed.
It's easy to get a homeowners policy and just let it automatically renew every year and not think about it. Unfortunately, this is one common mistake that could cost you everything. So, if this is a new home that The Marla Schneider Team recently found for your family, or one that you've owned for several years, it's in your best interest to take the time and read the policy thoroughly.
If you need help finding that perfect home which you'll want the best insurance policy for, contact Marla today to help you with your search.
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