Review homeowners insurance coverage regularly
At least once a year, it's a good idea to review the insurance coverage on your biggest asset: your home.
Your homeowners insurance coverage should start with a replacement cost policy that covers the entire expense of replacing your home if there is a loss.
You also can opt for what's sometimes called a "guaranteed" replacement policy that typically includes around 25 percent of additional coverage over the estimated value to replace your home.
No matter what type of home insurance you have, there are many ways to adjust your coverage, whether you need to add to your policy to cover Grandma's diamond broach or buy separate protection to guard against flood damage.
Supplement figures generated by your insurer for the replacement cost of your home by getting a second opinion from a local contractor.
Ask for an estimate of the real-world cost of rebuilding your home, including the expense of demolishing the structure, said public adjuster Robert Freitag, president of AmeriClaims Inc. in North Carolina.
"The agents plug in square footage and construction materials, and (the computer) spits out a figure," Freitag said. "Sometimes it's on, and a lot of times it's off."
Some other things to consider:
- Additions and interior renovations, such as a new kitchen, remodeled bathroom or finished basement, could push your home past its current insured value.
- If you put in a pool, you may need to upgrade your homeowners (insurance), but you also may need umbrella liability insurance.
- "If you have jewelry that costs more than $1,000, you will want to think about an additional endorsement, or you can buy a separate policy.
- If your policy only covers items stolen from your home or destroyed by fire, another strategy is to purchase a so-called floater policy for high-value items.
- Replacement cost policies usually don't include the same level of coverage for contents. Reimbursements for clothes and furniture is typically based on a percentage of the home's replacement value.
-- from wire reports
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