Home Insurance Articles

Assessing Your Damage Recovery Plan

2010-06-10

Home insurance should not be something a homeowner buys, then sticks in a drawer and then forgets about for years. A home is where life and growth happen, and the home insurance coverage should live and grow at the same pace. It's hard to imagine anything being worse than figuring that a home insurance policy is sufficient to cover losses caused in some disaster, only to find that your life had outgrown your insurance protection, and now you're left high and dry.

So, what to look for to be sure that what is lost or damaged is restored to you? First step is to haul the policy out of its burial spot and read it. What's covered? What's excluded? Who is protected, you or the bank? These are just the starter questions that need to be asked.

What's covered? Usually, the standard perils the insurance companies include are fire, lightning, wind, hail, theft, aircraft crashes, vehicle crashes, vandalism, smoke, explosion, volcanic eruption, and riots. But if you live in a coastal area where hurricanes are a real risk, is wind actually covered? Many times in these areas wind is one of the exclusions, and the homeowner needs to make sure that risk is covered. Houses in neighborhoods near rivers or, again in hurricane country need flood insurance. In Southern California, earthquake insurance is imperative. The homeowner needs to assess the likelihood of many different disasters happening, and tailor the home insurance policy to fit. Getting online quotes is the best way to comparison shop.

Then, determine whether the policy covers the replacement of possessions (including the house itself), or whether you get the cost minus depreciation. Is the house insured for its replacement value or just the outstanding balance on the mortgage? In both cases, damage replacement will be well near impossible. The homeowner needs to catalog her possessions, making sure the ones she accumulated since the policy was first written are included and covered. She should leave the master list with receipts in a safe place outside the home. An important part of any damage recovery plan is making sure a copy of the policy stays with you wherever you go.

An important part of insurance updating is sufficient liability coverage. A slip and fall on your property by someone litigious can ruin you. If you run a business out of the home, you need to cover that as well. Make sure you have coverage for living expenses if your house is destroyed, to keep a roof over your head while you rebuild. Get an online quote for everything.

Making a plan without the wherewithal to back it up is just daydreaming. Getting your protection in place is something you should do-now!