After the devastation wrought by Hurricane Katrina, more and more
Americans are worried about whether their homes are protected in case a
similar event occurs. So how do you know if your home is properly
insured?
According to Jeanne Salvatore, senior vice president of the Insurance Information Institute, "Homeowners should contact their insurance agent or company representative at least once a year to make sure that their insurance is up to date."
When you do, there are three questions you should ask your agent:
According to Jeanne Salvatore, senior vice president of the Insurance Information Institute, "Homeowners should contact their insurance agent or company representative at least once a year to make sure that their insurance is up to date."
When you do, there are three questions you should ask your agent:
Do I have enough insurance to rebuild my home? Make sure your policy covers the cost of rebuilding -- and don't confuse the real estate value of your house with what it would cost to rebuild in case of damage. And remember, most standard policies, which usually cover disasters such as fire or hurricanes, do not include flood coverage. Consider buying coverage from the National Flood Insurance Program (www.floodsmart.gov), or buy additional coverage from your current carrier.
Do I have enough insurance to replace all of my possessions? If something happens to your home, the things inside it aren't going to be in good shape either. If you have insurance, most standard homeowners policies will cover personal possessions for approximately 50% to 70% of amount of coverage you have on the house's structure. That may not be enough for you, so conduct a home inventory to detail everything you own. Determine the estimated cost of replacing all of these items. Then consider getting a cash-value policy, which will cover the cost of replacing your belongings minus the depreciation, or a replacement-cost policy, which will reimburse you for the full current cost of replacing your possessions. Of course, the replacement-cost policy will come with a higher price tag.
Do I have enough insurance to protect my assets? Your homeowners insurance protects your house and belongings, but it's also there to protect you against lawsuits. If someone suffers an injury on your property and decides to sue, the liability insurance will cover your legal fees and any damages you may have to pay. You should make sure you have enough liability insurance to protect all your assets so that you're not on your own in case you are on the losing end of a lawsuit.