Insurance World

There are many home insurance providers, and each of them will present you with a policy proposal outlining the kind of coverage you will get and the corresponding fees. However, before you sign on the dotted line, it’s important to really understand what you’re paying for—and whether or not you’re fully protected against the risks that you’re most concerned about. Here are some things to look at.

The typical home insurance plan is divided into two parts: property protection, and liability protection. This will be further categorized into the dwelling, other structures, personal property and loss of use.

The dwelling is the house proper, and all of its fixtures and structures. This includes heating, electrical wiring, plumbing, even the built-in appliances. Other structures are not connected to the house proper but are still within the property boundaries, such as garages, sheds, driveways, and walls and fences. However, a personal home insurance policy will not cover additions you made for business reasons, such as a store or even a room you converted into a home office.

Personal property basically refers to your belongings, the contents of your home that may be of value to you. This can be actual objects like artwork or antiques, jewelry or currency, and even electronic data that has a certain value. However, you should check what kind of items are covered in your basic personal property coverage. In some cases, very valuable items such as antique coins or personal heirlooms, or very expensive jewelry, exceed the limits in an average homeowners policy. Depending on the kind of assets you plan to keep in your house, you should make the proper adjustments—although in general, it is best to keep these items in a bank’s safety deposit vault.

Loss of use is when you are unable to use your home, and incur living expenses while looking for alternative housing.

Some policies will give additional coverage, though this can affect your overall cost. For example, you may want the policy to cover the cost of removing any debris if there is damage to the property because of a storm (important if you live in a country or state where you are at constant risk from weather hazards). Other policies will also guarantee the cost of replacing any structure that was destroyed. Theft coverage will protect you in case of burglary, and can be extended to include whatever objects you had in your car or trailer at the time of the incident. Personal property protection can even minimize your risk form credit card fraud, in case your credit card was one of the items stolen.

Policy owners may also ask for an Inflation Guard, which will adjust the amount of insurance you receive every year to be able to keep up with the changes in real estate values caused by inflation. This means that even 10, or 15 years down the road, you will receive the adequate coverage to actually replace your home in case of a severe accident.

Every home needs a home inventory updated at least once a year. Homeowners who live in hurricane stricken areas like Florida, coastal regions of Alabama or Louisiana and Texas are used to putting together a home inventory on a regular basis, but for those homeowners who live in the Midwest or in regions of the country without hurricane season abounding, they may think there is no need for a home inventory. This just is not the case!

No matter what part of the country you live in, a home inventory is a must have because fire, flood, and wind or tornado damage as well as theft or lost property can happen to anyone at any time. Not having your home inventoried can make the process of dealing with insurance agents an absolute nightmare, especially if you are trying to visualize from memory everything that was lost, damaged or stolen in your home while speaking to an insurance agent on the phone. The best bet for making sure your household goods are replaced to the fullest extent, is to keep some type of home inventory to help better replace these items.

There are several different ways to inventory the belongings in a home. Of course one of the easiest ways to inventory items is to get a notebook and pen and walk from room to room writing down anything that would or should be replaced in case of damage or loss. Inventorying items this way can be time consuming, but allows for everything in the room to be examined and approximate values to be determined, which should be included on an inventory list. The next step up from pen and paper would be to write the home inventory on a Microsoft excel spreadsheet or simply in a Microsoft Word file.

If the means are available for more hi-tech versions of inventorying home items, this is probably the best option. Simply turn the date and time stamp on the 35mm or digital camera and go from room to room taking pictures of each room, labeling the pictures with item information once the pictures have been developed.

Many homeowners also use video cameras to go around the house recording what each room looks like at a certain time and date. This is a great way to get a live action shot of what the material items look like at present and can easily be handed over to an insurance company.

A few tips to keep in mind when creating an inventory is to always keep receipts for major purchases and store these with the home inventory. The more you can estimate for the Homeowners insurance company the price and date an item was paid for, the more likely a price near that cost will be given back for repayment. If possible, it is also best to write down where the item was purchased at, the model number and a manufacturer’s name.

As well, it is important to always note the date and time on the inventory, and this is why using a still or video camera is a great idea. Although the Homeowners insurance company is supposed to be on the side of the insured, they will be estimating costs at a minimum to save themselves money. So be smart about a home inventory, so that items will be replaced at full cost and in a timely manner.

Remember that it is not necessary to inventory items that would not be missed if they are lost or damaged, such as a paperback novel or a $10 pair of flip-flops, but if you are a book collector who has an extensive collection of antique books or a shoe collector who has hundreds of dollars worth of shoes, be sure to inventory these items.

Of course large items like furniture, artwork, appliances, electronics, large sports equipment, and large outdoor equipment should absolutely be inventoried. It is probably wise to also inventory or at least photograph clothes, home interior accessories, tool sets, kitchenware, and even workout equipment, but the major rule of thumb is to know the value of your own personal property to determine if it is worth adding to a home inventory list.

After the home inventory is created it should be placed somewhere other than the home. This could be stored at a family member or neighbor’s home, although the safest place for a home inventory list is in a safety deposit box or a fire and flood proof security box.