Home Insurance: What You Need to Know
By LESLEY ALDERMAN
January 26, 2009
Your home is probably your largest and most important investment — not to mention that it’s also the roof over your head. Here’s how to make sure you get the right coverage.
While plans may vary from insurer to insurer, a standard homeowner’s policy generally has four components.
COVERAGE FOR THE STRUCTURE This is the most important aspect of any policy. It covers damage to your house from fire, storms and other disasters (see exceptions below). It’s wise to insure your home for 100 percent of what it would cost to rebuild it. If destruction is complete — if, for example, your home burns to the ground — you will then have adequate funds. To determine what that amount would be, hire a local builder who can give you an estimate. Or figure it out yourself by using the free calculator at Building-Cost.net. A basic policy will insure your home against major disasters, except for flood, earthquake, war or nuclear accident. (For flood and other coverage, see below.) In addition, it will cover other structures on your property like a separate garage or shed. Some companies cover you at just 10 percent of the value of the structure of your home.
COVERAGE FOR CONTENTS Most plans will also cover the cost of replacing your personal belongings if they are stolen or lost in a fire or other insured disaster. The standard coverage limit is equal to 50 percent of the value of the structure of your home. So if you have determined that it will cost $200,000 to replace your home, then you could have about $100,000 of insurance coverage on your personal belongings. To make sure this is adequate, make a detailed list of the contents of your home, including furniture, clothing, tools and appliances. Or use the Insurance Information Institute’s free home inventory software, which you can download at knowyourstuff.org. It’s also smart to take pictures of all your valuables and save them in a safe deposit box or fireproof box — doing so will make filing a claim much simpler. Most companies provide off-premises coverage as well, meaning that your belongings will be covered anywhere in the world. So if your camera is stolen while you’re on vacation, you can file a claim for reimbursement. Some companies limit the amount to 10 percent of the total coverage you have on your possessions. You will also probably have up to $500 of coverage for unauthorized use of your credit cards.
LIABILITY PROTECTION A standard policy covers you in three ways. It covers damage to other people’s property. If your son accidentally throws a ball through your neighbor’s window, your policy will cover the cost of the damages.
It covers personal liability. If someone sues you or the courts find that you are legally responsible for someone else’s injury or property damage, your policy pays for both the cost of defending you in court and any court awards — up to the limit of your policy.
It also covers medical expenses for injuries suffered by others. If a friend or neighbor is injured in your home, he or she can simply submit medical bills to your insurance company.
Most homeowner policies provide a minimum of $100,000 of liability protection. But some experts recommend that you purchase at least $300,000 in protection or more, depending on your assets.
REIMBURSEMENT FOR ADDITIONAL LIVING EXPENSES Should a fire or any other insured calamity destroy your home and force you to leave, your plan will cover your expenses. In general, this coverage includes hotel bills, restaurant meals and rental car bills. Many policies provide coverage equal to about 20 percent of the coverage on your house.
In addition to your basic coverage, you may need to buy additional riders. For instance, if you have expensive artwork or jewelry, you may want to purchase a separate policy to cover them. Coverage for jewelry, for example, is limited to about $1,000 to $2,000 on standard policies.
If you live in an area that’s vulnerable to floods, you’ll need additional insurance. Federal flood insurance is available to communities that participate in the National Flood Insurance Program. You can purchase a policy directly from your insurer. If you’re not sure what your risk may be, you can assess it at the flood insurance program’s site.
When buying a policy, be sure to shop around, since prices can vary considerably. For starters, check in with the insurer that covers your car. Companies often give breaks to consumers with multiple policies. Check in with neighbors and ask them about the company they use and how satisfied they have been with the service they have received. Then, go to a large Web site like InsWeb or Insure.com, to compare policies and prices.
When you have a few reasonable quotes, do a background check. Ask the companies what kind of ratings they have from the leading firms like Standard & Poors, or Weiss. And remember, it’s not all about the bottom line. If a company takes months to process your claim or is in financial trouble, a price break may not be worth it.
Go for a high deductible. A policy with a $1,000 deductible will be considerably less than one with a $500 one, and the odds are that you will not be making many small claims. In fact, it’s not worth your while to be doing that anyway. Insurers have been known to drop consumers who make more than two claims in one year. For small problems like a stolen bicycle or minor water damage, pay for it yourself.
Be sure to ask your insurer about discounts. If you have protected your home by installing smoke detectors, an alarm system or fire retardant roofing material, you may qualify for a lower premium — but you have to ask. In addition, if you are over 55 and retired, you may be able to get a price break since mature individuals are considered a lower risk.
Lastly, keep your policy up to date. If you remodel your kitchen, buy an expensive new painting, or add a new wing to your home, let your insurer know and adjust your coverage accordingly. But if your home’s market value falls, don’t rush to lower your coverage. The cost to rebuild, alas, will probably not change.
Home Insurance & Home Security Systems
read more...
Home Insurance & Home Security Systems
Tips for cheaper home insurance
Tuesday, 27 Jan 2009 11:40
With 2009 set to be a year of recession, everyone is looking to make cut backs.
But is home insurance, one cut too many? Or are there ways cut back the costs of cover for building and contents and not be left with an unfortunate bill come some domestic disaster.
Sarah Routledge looks at ways of cutting your home insurance bills.
With the British weather quickly changing from ice and snow to gale-force winds, this time of year is a good time to check your cover is up to scratch.
Failing to keep your house in good repair or leaving it empty for long periods may invalidate your policy, Steve Sweeney, head of home insurance at Moneysupermarket.com, warns.
"Safeguarding against the effects of cold weather is essential and therefore understanding the small print of your home insurance is too; there is no doubt homeowners would be shocked to discover burst pipes may not even be covered.
"Many of us will have resolved to understand our finances better in 2009, and being aware of your insurance policies is certainly part of that.
"Facing a situation where your pipes have burst and you are not covered would be a real blow to family finances. I advise homeowners to scour the small print of policies and contact their insurer if there are any uncertainties."
A home insurance policy is generally demanded by banks as a condition of the mortgage, and is often sold alongside the loan. Although it may be simpler to accept this policy, it is very likely you could find a cheaper deal by shopping around.
"The home insurance market is very competitive so by shopping around you could save significant amounts of money," says LV= spokesperson Emma Holyer.
"Even if you want to stay with your current provider, call your insurer to review the cover you have as it maybe that they can offer you a better deal than the one quoted in your renewal pack."
Linking buildings and contents insurance
Many insurers also offer free contents insurance with home insurance, but it is worth checking whether it is cheaper to buy the two separately.
It is also important to make sure you are not over-insured, Ms Holyer adds.
"Buy a policy from an insurer to allow you to choose the amount of contents you want covered.
"Some insurers offer a 'blanket cover' policy which includes cover up to a set amount. This can be more expensive than an individually rated policy.
And make sure you are not paying for the same cover twice, Ms Holyer adds.
"Check if you have personal possessions cover on your travel insurance policy. If you do, and also have it on your home insurance policy, it may be that you are paying for the same cover twice. Consider cancelling the personal possession cover element of your travel insurance."
Having said this, it is vital not to underestimate the cost of replacing your contents in the event of a flood or a fire.
"The value of a customer's home can soon add up to much more than they think," Phil Kennedy, business development director for Legal & General warns.
Legal & General has estimated that the value of the contents of an average three-bedroom home could easily be worth £40,000.
"Household insurance cover is not a luxury purchase. When home contents cover can be provided for as little as £10 to £20 per month, which represents good value, even when household budgets are being stretched," Mr Kennedy adds.
Legal & General has developed a home contents calculator, to help customers work out the amount of cover they need.
For those who want to be on the safe side, there are several insurers, including Halifax and Marks & Spencer who offer unlimited contents cover.
Ensuring insurance value for property is correct
It may also be worth re-evaluating how much your home would cost to re-build – many people estimate this wrongly, assuming it is much higher that it really is, which pushes up the premium.
According to research from Confused.com, spanning six months, ten per cent of consumers thought that rebuild cost and purchase price were the same, and 20 per cent thought that rebuild cost was higher than the initial building cost.
In fact, a semi-detached house, worth around £180,000 and measuring 742 square feet, with a garage, would cost £85,700 to rebuild if it was located in the south-east and £79,700 to rebuild if it was in the north-east, the comparison website says.
If you think you may be paying over the odds, the Association of British Insurers' rebuild calculator can help.
Be secure
Lowering your risk is another good way to cut your premiums, Norwich Union's Rebecca Holmes says.
"If you have the approved window and door locks, or if you live in a Neighbourhood Watch scheme, then there are savings there.
"A burglar alarm could also save you money," Ms Holmes suggests.
If you are considering adding extra security features to your home, ring your insurer and find out what discount you could be entitled to, and what the recommendations are.
Home Insurance & Home Security Systems
read more...
Home Insurance & Home Security Systems
LV= home insurance available on Gocompare.com
Tue 27th Jan 2009
Customers looking to compare home insurance quotations may welcome the news that LV= home insurance policies have been added to the list of available products that they can search for using Gocompare.com.
The insurer announced that it had signed a deal with the price comparison website after adding its car insurance policies to the site resulted in a "really great" increase in sales.
LV= said its home insurance is also available from Confused.com and Moneysupermarket.com.
Paul Wishman, group ecommerce director at LV=, said: "We believe our five star Defaqto rated home insurance policy will prove to be a popular choice for consumers using Gocompare.com."
Recently, LV= announced the signing of a strategic partnership with Nationwide Building Society in order to sell car and travel insurance policies.
The deal means that LV= is the exclusive provider of car and travel insurance for Nationwide customers.
Home Insurance & Home Security Systems
read more...
Home Insurance & Home Security Systems
Home Security and Homeowners Insurance Tips
Home security is the best way to protect your family and your belongings. Home security is something that can be put on the back burner right behind excitement, decorating, and house warming parties.
System
Cool things your home security system can do that you might not know about. Supplement your home security system with a personal safety device. And statistics have proven what you already know by common sense: a complete home alarm system is an excellent deterrent to intrusion.
Door
Doors with decorative glass panels or windows are easy marks.If you don t have a window in the door or some other way of checking who is calling, fit a door viewer. Keep your doors locked even when you are at home. You can make wooden doors stronger by fitting a steel strip and plates to the door frame and around the lock.
Windows
Back doors with worn or old locks, open windows, basement windows that can be kicked in easily, and newspapers piling up on the front porch encourage burglars to attempt a burglary. Don't build pergolas, gazebos and so on too near to the house, they can help thieves reach upper windows. Ask your local police station for advice on how to get stickers to display in the front and back windows of your home to show that you have marked your belongings. Keep your house and car keys safe and away from doors and windows. Secure all accessible windows with secondary blocking devices Block accessible windows open no more than 6 inches for ventilation Make sure someone cannot reach through an open window and unlock the door. Make sure someone cannot reach inside the window and remove the blocking device. Use anti-lift devices to prevent window from being lifted out. Use crime prevention or alarm decals on ground accessible windows. Be a Good Neighbor.
Insurance
Can you really get a discount on your home insurance by installing a home security system? Burglars won't find your home an "easy mark" if they are forced to work in the light, if they have to take a lot of time breaking in, or if they can't break in without making a lot of noise. Most insurance companies provide 2 percent to 15 percent discounts for devices that make a home saferdead-bolt locks, window grates, bars and smoke/fire/burglar alarms. You could save up to 20% on homeowners insurance! Since your house provides shelter for you and your loved ones, home insurance should guarantee that you will never be in a position to lose it.
Key
Key locking devices are much preferred because they can prevent the burglars from using the door or window to remove stolen property. Don't carry house keys on a key ring bearing your home address or leave house keys with your car in a commercial parking. Don't hide your keys in "secret" places outside your home.Burglars usually know where to look. Remove the keys and keep them out of sight in a safe place.Take a look at your front door key. Be sure your keys don't fall into the wrong hands.
Home security locks should be considered the first step to be taken when implementing a security plan for your house.
Article Source: http://EzineArticles.com/?expert=Milan_Stapa
read more...
Home Insurance & Home Security Systems
Subscribe to |
