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Protect Your Property Investment by Reviewing Your Home Owner Policy

When a natural disaster threat is looming, it is too late to start thinking about buying home insurance. Now is the time to review and update your home policies.

Check the reputation of the insurance company you are considering using for handling previous claims.

Make sure you know what it would really cost to buy or build a comparable home. Get several estimations from local builders and then get a quote from your insurance agent on their suggested policy.

Understand your replacement coverage. You may need to adjust your current policy accordingly. Also ask what you would be paid if you decide to move to a different location.

Some insurance policies may stipulate that you have to rebuild on the same plot of land in order to fully collect.

Actual value coverage means you will be paid for the depreciated value of your lost items, not for the replacement cost of the item. Actual value coverage means if your roof was 15 years old, the company will pay for the remaining life of the roof. Replacement cost means that the company will pay to replace your 1980 television set with a brand new one.

Know how much it would cost to reconstruct a home like yours in current updated local codes and ordinance.

Review your home owner policy. Most standard policies cover damage from wind, but not flooding. Damage from rising water or blown in rain from storm is not covered in standard policy. If you live in a flood zone or an area susceptible to hurricane and strong storms, you need flood insurance to cover your home contents.

Most home contents cover only 50 percent of the dwelling coverage. If you have valuable items, it is easy to get extra coverage. You will have to pay a higher premium, but it is worth it.

Inform your home insurance company of any remodeling or extension. If they don’t know about it, they will not cover the replacement cost.

All home owner policies pay the cost of temporarily living away from home while the construction of your house is under way. If you still owe the bank, you will need to pay your mortgage each month. Would you survive comfortably from the amount you would receive from the insurance company?

If your claim was denied, ask for a detail description of why and challenge the findings. Contact your state insurance department and file a complaint.

April 5, 2016 / by / in
Life Insurance Considerations to Protect your Home Investment
  • You need life insurance policy if you have a spouse, children, or elderly parents who depend on your income.  Here’s what you need to know.
  • Buy Renewable Term-Life Insurance:  Term-life insurance is simple and affordable.  Term-life allows you to buy a policy for a set period- anytime from one year to 20 years or more.  You can cancel the policy at anytime.  With renewable term-life, you pay a small premium each year in exchange for pure insurance coverage.  Be sure it has a level premium; that means the annual payments will not go up for the duration of the policy.

 

Insurance Coverage:  Determine the amount of money the survivors would need to maintain their standard of living until they can take care of themselves.  If your goal is to protect your children, choose a term policy that will give you coverage until your youngest child is 24 years old; by that time, the children can support themselves.

 

  • Choose a Generous Policy:  You need to be sure that you have enough coverage but also keep your insurance premium affordable.  If the survivors require $50,000 a year for living expenses and if the death benefit is invested at the current interest rate of 5 percent, you need a $1,000,000 death benefit policy to get $50,000 annually in pre-tax income without your survivors having to touch the principal.
  •  Shop on Line:  Check out term-life insurance rates and compare prices.  The premium is based on your age, gender, health, benefit needed, and the term.  A 20-year, $1,000,000 policy for a healthy 40-year-old female cost $850 a year and that is less than $75 a month; that offers valuable protection against financial loss.
  • Beneficiary:  Set up a living revocable trust and making the trust, not a person, the beneficiary.  Whomever you have appointed as the trustee will be able to use the funds to take care of your minor child according to the directives you have specified.

Review Your Policy Periodically:  Assuming you save for your retirement, once you reach 65 years old, you won’t need insurance because you will have sufficient income from your retirement account, pension, and social security.

April 4, 2016 / by / in