The recent coverage of Hurricane Dean and other weather-related disasters across the country should be giving homeowners everywhere cause to take a minute and review their homeowners insurance policies. It is a good idea to look over your policy periodically to be sure you are familiar with all of its details and feel comfortable that you will be protected before a natural disaster strikes or you have to file a claim. Below are 5 tips for understanding your homeowners insurance:
1. Look for exclusions to coverage. For example, most policies do not cover flood or earthquake damage as a standard item – these coverages must be purchased separately.
2. Look for dollar limitations on claims. Even if you are covered for a risk, there may be a limit on how much the insurer will pay. For example, many policies limit the amount paid for stolen jewelry unless items are insured separately.
3. Understand replacement cost. If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. This means that if your home is insured for $150,000 and it costs $180,000 to replace it, you’ll only receive $150,000.
4. Understand actual cash value. If you choose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation.
5. Understand liability. Generally your homeowners insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.
To learn more about homeownership and Okemo Mountain real estate, please visit my website or call me at 802-226-8022.