Dr. Mary Ann Campbell, CFP® = "Dr. MAC"

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Homeowner’s Insurance

Thursday, October 25th, 2012

“Insurance premiums are expensive…until you have to make a claim,” according to blogger David Koch of www.Kochie.com.au.   Your home may well be your largest investment.  Adequate coverage can restore you financially from disasters such as storms, fire, and tornados.

Floods and earthquakes require separate policies or riders.  Flood insurance can be purchased from the Federal Emergency Management Agency (FEMA) at www.floodsmart.gov.  Earthquake insurance entails a special rider and has high deductibles.   

Insurance policies are not like reading a novel.  They are full of legal terms. Because your policy is often sold to a re-insurer, who also has terms, only what is written is what will be covered by all parties.  You may well have several reasons to file claims on your homeowners insurance during your lifetime.  Consumer Reports states the average homeowner files a claim every six years.  Therefore, having a good insurance agent is important with homeowners since an experienced agent with good communication skills can help you avoid pitfalls of inadequate or unnecessary insurance.  An independent agent can shop different insurance companies and policies.  Ultimately, you are responsible to read and know what is in your policy.    

First determine your home’s risk and determine how much coverage you’ll need.  Use Zillow.com or a local builder to establish the amount of coverage you want to purchase. 

Your insurance agent can go over the six types of home insurance coverage offered in a standard policy.  They are your 1.) dwelling, the structure of your home; 2.) other structures such as a detached garage or building; 3.) personal property like personal items and household contents (usually covered at 50-70% of your home coverage); 4.) loss of use providing living expenses during repair; 5.) personal liability protection covering you in the event of a lawsuit over bodily injury or property damage; and 6.) medical payments covering medical expenses due to injury sustained on your property. 

 You may purchase through an agent, or shop online for homeowners coverage.  Shopping websites include www.affordableHomeInsurance.org; www.esurance.com; www.homeinsurance.com;

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