What’s in Your…… Homeowners Insurance Policy?
August 30th, 2007 categories: Buying San Diego Real Estate, San Diego Real Estate
Have you reviewed your insurance policy of late? Probably not. After closing on the purchase of your home, (how many years has it been now), you put the policy away feeling all nice and secure that you have it and go on about your life. Do you think you are fully covered against most of the even more common perils that might befall you and your home?
I hate to break the bad news to you but you probably are not as well covered as when you purchased your home. And since you havent even looked at much less read the policy, you wouldnt remember anyway. Have you spent more than lets say $5,000 on personal property since you bought your home. That new wide screen TV or that great new computer and printing system. Any new fashions? New furniture? A whole new remodeled Kitchen, Wow!
Does your policy cover the cash value of your home or the replacement cost? Has your home gained value since you purchased it? Have you been adding to the amount of coverage or added riders on or upgraded the estimated value the policy was based on originally? Nope, got ya again.
Did you know that the Cash Value replacement is the amount it would take to repair or replace damage to a home and it contents subject to one condition you might not like too much. It is subject to depreciation and things are older now than when you first covered them , especially in the personal property category. Unless all your possessions are antiques, those items have not gained in value but would most certainly be more expensive to replace. One thing is certain, if you have cash value coverage, in the event of a covered loss, the actual cash payout would be thousands of dollars lower than a benefit based on replacement cost.
I would bet your life insurance is in way better condition. Which of the these two scenarios is more probable in your life, lets say in the next 3 to 5 years.
1. You are going to die?
2. You are going to have a loss at your property, a fire, a theft, a leak, a rainstorm with some water intrusion, a flood, a slip and fall, a stolen or damaged vehicle,a sewer back up or a tree blown over onto the roof from a heavy storm. Are these events or other items that might be covered in or on your property more or less likely to happen than you dying? If they are, you would be well served to get that policy out now and discover ( or re-discover as the case may be ) what you are or are not covered for.
Lets hope that neither of these aforementioned two scenarios happen to you but you should still answer the question.
Since you have read this far, might this be a very good time to stop reading this article and make a phone call to your insurance representative and set up an appointment to discuss exactly in what state of coverage is your your insurance homeowners policy and are you protecting yourself and your family well enough in case of a loss?
When considering insurance for your home, also consider your insurance options regarding your mortgage. A term life insurance policy may be signficantly cheaper than bank mortgage coverage. Term life also allows you, NOT the bank, to name the beneficiary, thereby giving you the financial control.