Saturday, May 28, 2011

Are You Covered? Sure About That?

If you’re a DIYer, Memorial Day weekend is generally the equivalent of a religious holiday to all things home-related. So, I’m pretty sure you have a healthy to-do list all written up.

But, while you’ve got this extra time, I’m going to recommend that you move something up to the top of that list: Read Homeowner’s Insurance policy. I’m recommending this for a few reasons. First, with our homeowner’s renewal check going out this week, I became aware of something on my policy that I didn’t know. Second, rates are in rapid rise mode so it might not be a bad idea to comparison shop if you’re renewing soon. Third, recent violent weather – some of which came within three blocks of us.

1. 80 percent coverage. Say what?! If This D*mn House burned to the ground, in order to rebuild it, I’d automatically be $25,000 to $35,000 in debt – beyond insurance’s share, for a property that is PAID FOR. That’s because I didn’t know that we didn’t have 100 percent coverage. Apparently, 80 percent is a minimum and what most mortgage lenders require you (or used to) to carry on your home. Apparently, that’s what we had. A revised policy was sent to us, upping the premium by less than $100. So, which sounds better: Less than $100 now … or up to $35,000 later?

2. Dramatic increases. Our rates went up about 7 percent this year. Not outrageous and not surprising considering the number of claims that they’re no doubt paying thanks to Mother Nature and her endless tirade. But that wasn’t the part of our recent renewal that got me. It was buried on Page 2 in the form of a $1,000 deductible – or DOUBLE our current $500 deductible. OR 10 TIMES the $100 deductible we had prior to July 2006. That is a 500 PERCENT INCREASE in under five years! And the deductible level in mandatory. It used to be that you could pay a bit more in premium to have a smaller deductible. That is no longer the case.

3. Violent weather. It seems almost nowhere is immune to Mother Nature’s wrath this year. And you just never know if it will be your town, your block, or just your house that she’ll choose to level next. If we’ve learned nothing this spring storm season, we’ve learned just how indiscriminate the damage can be. How many times have we seen one or two homes completely obliterated, only to see neighboring homes suffer infinitely less damage? The only thing that would be worse than losing everything or losing loved ones in one of these disasters would be to fall victim to a financial tornado in the aftermath of such tragedy. What about flood insurance? If you live fairly near water, you definitely need to check into it. Homeowners' alone won't cover flood damage.

So, if you haven’t looked at your homeowner’s policy in a while, please do. Use some of this extended weekend to make sure that you’re covered or to pull a list of questions together for your agent if you find out that you’re not.

I think it will be well worth your time.

1 comment:

Jayne said...

I feel for ya with the deductible--mine's $1100. Ouch. I used to work for a major insurance company (the big red one) so when I bought the Kelly House, I made sure I had 100% coverage. Good call with the flood insurance, too. Most people don't realize until they try to make a claim that flood isn't covered under most ordinary policies.