Altadena Real Estate


Homeowner’s Insurance Tips

Many people believe that their homeowner’s insurance policy provides protection against most disasters. Sadly, most people don’t discover there is an issue with their policy until they have a major claim. To protect your home and your wallet, the first question you should address is whether you have the right type of coverage for the risks in your area. The second issue is whether you have the appropriate amounts to cover any losses that you may incur.

Here are some valuable tips to ensure that you have adequate coverage:

1. PAY FOR ADDITIONAL COVERAGE FOR “SPECIAL” ITEMS
If you have jewelry, computers, artwork and other valuables that exceed your basic policy limits, you will need a special rider to cover those items. The same is true when it comes to insuring for earthquakes, floods and hurricanes. For example, assume that there is a major earthquake in your area. During the quake, your next-door neighbor’s gas line breaks. Both of your homes burn down. In this case, your fire insurance policy would not cover your loss because an earthquake was responsible for the fire. To be covered, you would have needed a separate earthquake policy.

Most home insurance policies cover “water damage.” The challenge is that if the damage comes from the ground up (i.e. from a flood), it is not covered unless you have flood insurance. To determine whether your property is in a flood plain, visit the FEMA Web site where you will also find a wealth of information about what is available on a federal level to protect your property.

2. DON’T OVERPAY FOR BASIC HOMEOWNER’S COVERAGE
Many lenders will automatically ask you to insure your property for an amount equal to the loan amount. In many places in the country, the loan amount is significantly higher than the replacement value of the improvements. Carrying “extra” coverage is a waste of money.

3. INSURE FOR “FULL REPLACEMENT VALUE”
Make sure that your insurance policy covers “full replacement value.” Some policies reimburse you only for the “depreciated” value of your appliances and other household items. Also, make sure that your policy provides for replacement with the same quality. You don’t want a $1,000 stove to replace your $7,000 top-of-the-line restaurant-style range. Check with your insurance agent to make sure these provisions are in your current policy.

4. DOCUMENT YOUR HOME’S CONTENTS
Take pictures of as much of your house as possible. Include both the inside and the outside. If you have a video camera, use that as well. Many people overlook artwork, silver, china, clothing and other items. Store your pictures and videos in a safe place away from your property.

5. MAKE SURE YOUR HOME MEETS THE INSURANCE COMPANY’S REQUIREMENTS
People sometimes forget to maintain their fire extinguishers and smoke detectors as required by their homeowner’s policy. Failure to have these protective devices in good working order could result in denial of your claim.

6. IF YOU OWN A CONDO, PURCHASE A POLICY SEPARATE FROM THE HOA’S POLICY
The “master policy” on a condominium building provides for replacement of the building. It does not provide for replacement of your personal belongings, nor does it insure you against theft or other types of losses. You will need a condominium owner’s policy to cover those additional risks.

7. CONSIDER PURCHASING AN “UMBRELLA POLICY”
These policies provide extra liability coverage from both auto accidents as well as for your home.

If you have questions about your coverage, speak to your insurance professional. Also, it’s wise to compare costs and levels of coverage. Check the Consumer Affairs Web site to learn more about how your insurance company ranks as well as what to do if you have a problem with a claim.

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