Protecting What You Own:Homeowners Insurance
If you’ve ever experienced a major loss – a fire in your home, a burglary in your apartment, an automobile accident – you know how devastating these unforeseen incidents can be to your total financial picture. Within a few minutes (or even seconds), much of what you’ve worked so hard to acquire can be totally wiped out. The potential for these types of losses make homeowners and auto insurance a necessity, even for the most humble of dwellings or vehicles!
With both homeowners and auto insurance, there are a number of options for coverage. Although each option adds to the total premium cost, and you may not want or need every option, learning about the various options will help you be sure that your ‘heirloom silver’ is covered by your homeowners policy or the ‘neighbor’s fence’ that your teenager hit, is covered by your auto
Inflation Guard Coverage
When buying homeowners insurance, consider how much it will cost to rebuild whatever part of the home was damaged. Building coast are always on the rise, and you will need to be sure your coverage will increase to keep up with inflation. Your insurer should help you determine how much coverage you need based on local construction costs.
Coverage for Additional Structures
Is your guest house or detached garage included in your basic policy? If you have any other structures on your property, such as workshops, studio, swimming pool, carport, etc., be sure to double check that you are covered. Typically, these structures are automatically covered for a maximum of 10% of the value of the house, but yours may be worth more.
Replacement Cost Coverage
Most basic plans only provide for the actual depreciated value of the item claimed. Be sure to read your policy to determine what possessions are protected in your basic plan. If your possessions are destroyed or stolen, you will probably need to replace them.
Personal Articles Supplement
This coverage protects valuable items that are worth more than the limits available on most basic plans. For example, you may want to add this supplement after having jewelry appraised, or after purchasing a valuable stamp collection, or a fur coat.
Loss Assessment Coverage
If you live in a condominium, you may need more than a ‘Basic’ policy. It is possible for an association to file a claim for a loss that exceeds its own coverage. In that case the unit owners may be asked to make up the difference. For example, someone may get injured while on the property and the association is found to be at fault.