Does homeowners insurance protect you?
Replacement
cost coverage varies
Different insurers offer varying levels of
replacement cost coverage, so you need to
check your policy or with your insurer to
see what is covered in your area and what
the limits are. Some companies add maximums
to replacement cost coverage policies to protect
themselves from overexposure in the case of
loss.
For example, some insurers limit the replacement value on roofs. "The insurance company wants to limit its liability on old roofs," says Griffin. "Some people were waiting to replace old roofs until after winter storms."
Homeowners would file claims
for storm damage, and the company would then
replace the old, ready-to-be-replaced roof.
Now some insurance companies limit the amount
payable on replacing a roof, especially when
the roof is over a certain age.
Other companies limit or exclude
items in other categories such as business
property, film, tapes, cassettes, records,
art, memorabilia or collectors' items. Check
with your insurer to determine if you need
special riders to cover your particular items.
Remember, you are insuring your home and your possessions -- not your land. Think about what it would cost to rebuild your house and replace its contents, not what the market value of the house is.
Inventory your valuables
Calculate the value of your personal possessions by creating an inventory. Keep the inventory in a protected place outside your home such as in a safe-deposit box. If you have especially valuable items such as jewelry, artwork or computer systems, you may need additional insurance to cover them.
Written appraisals for jewelry,
along with photographs, should be stored with
your inventories. The insurance company will
need this information if you have to file
a claim. Also, if your house is broken into
or destroyed, you will be able to identify
missing items more readily by using a prepared
inventory.
While videotape is great for
documenting your large possessions, a written
inventory is critical for noting small items.
It's best to inventory all of your items with
a detailed description, including make, model,
price paid, location and date of purchase.
Keep photocopies of your receipts or other
pertinent information with your inventories.
Go through your house room by room and complete
a written and visual inventory for each one.
| -- Updated: July 14, 2008 |
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