Congratulations on the purchase of your new home! Now that you're unpacked and settled in, you should think about evaluating your insurance needs. You probably already have homeowner's insurance as this was a requirement of your mortgage company, but is it enough to protect you? Get this business out of the way now and enjoy life in your new home.
You most likely have a mortgage on your home, so your lender required a certain amount of insurance coverage in the event of a loss. If your home were to burn to the ground, would you be able to write a check to cover the balance due on the mortgage or to rebuild? Of course not! This is just one reason you carry homeowner's insurance. The minimum coverage you must have to satisfy your lender is a policy in the amount of the appraised value or the purchase price of the home. But have you thought about your furniture, appliances, clothing and other belongings? How do you replace everything you own should there be a fire or theft? These are things to consider when purchasing homeowner's insurance. An experienced insurance agent will ask you about your assets and calculate how much additional coverage you need to be completely covered in the event of a total loss.
Flood insurance is not covered under a standard homeowner's policy. Some people live in an area where lenders will require flood insurance. Even if it is not required, but you live in a low-lying area or near a lake or other large body of water, you may want to purchase additional flood insurance. Flood insurance is for weather or nature related flooding. Your standard policy should cover flood damage if, for example, you're on vacation, your furnace fails and your pipes freeze and burst. But you may not be covered if your finished basement is flooded due to excessive rain. Be sure to ask your insurance agent about this.
The law requires everyone to carry a minimum amount of auto insurance to cover damages and injuries caused to others in the event of an accident. If your car is financed, the financial institution will recover full coverage so that the loan paid if the car is wrecked beyond repair. But, if you are in a very serious accident causing major damage, injury or death and it is determined to be caused by your negligence, you may not be adequately covered. If you are sued, you stand a chance to lose everything, including your home, business and other valuables you may own. Now that you have purchased a new home, it is a good idea to evaluate all your insurance coverage to be sure you are protected. You may need to purchase an additional umbrella policy to protect your assets should damages exceed the coverage limits of your current auto and homeowner's policy.
What if you become ill or are injured and unable to work? How would you pay your mortgage payment? Disability insurance will pay you a monthly benefit to replace a portion of your income until you are able to work again. Many employers provide disability insurance to their employees. If you are self-employed or do not have this benefit where you work, you may want to purchase additional coverage.
If you are the head of the household and the primary wage earner you should consider purchasing life insurance to protect your family and home if you should die. Life insurance can help provide for your family, paying off debts and replacing a portion of your income to take care of their needs. Some employers provide life insurance, but it might not be enough to provide financial security to your family.
A lot of the above insurance categories are optional; many are nice to have if it fits into your budget. A couple of newlyweds may not think about all these needs, but as your family grows, so do your financial needs. Be sure to consult your insurance agent to discuss your insurance needs now and in the future as you accumulate additional assets or have children. If you should get a large pay raise or a promotion at your job, consider using some of the extra money to purchase additional insurance coverage.
This article was written by Ted Lewicki, a Farmers Insurance agent located in Waterford, Michigan. Ted has been an insurance agent for nearly 50 years. He has been a member of the Better Business Bureau with no reported complaints. Ted interviews his clients to learn just what type of policy they need so that they are adequately covered in the event of an unfortunate accident where they may be sued. http://www.a-oneinsurance.com/ services Oakland County, Michigan with many clients in Waterford, Pontiac, Rochester, Auburn Hills, West Bloomfield, Keego Harbor, Milford, White Lake, Walled Lake, Wixom and neighboring cities and communities.
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