2008 Insurance Guide
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insurance
Does homeowners insurance protect you?

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.

Heidi St. Jean is a freelance writer based in Connecticut.

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