How to insure your home and per­sonal belongings

When you insure your home, you are really insur­ing two dis­tinct things —

1. The struc­ture of your home
2. Your per­sonal belongings

The struc­ture of your home

There are many ways to insure the struc­ture of your home:

1. REPLACEMENT COST — Insur­ance that pays the pol­i­cy­holder the cost of replac­ing the dam­aged prop­erty with­out deduc­tion for depre­ci­a­tion, but lim­ited to a max­i­mum dol­lar amount.
2. ACTUAL CASH VALUE — Insur­ance under which the pol­i­cy­holder receives an amount equal to the replace­ment value of dam­aged prop­erty minus an allowance for depre­ci­a­tion. Unless a home­own­ers pol­icy spec­i­fies that prop­erty is cov­ered for its replace­ment value, the cov­er­age is for actual cash value.

If you have an older home…

You should insure your home for the total amount it would cost to rebuild your home if it were destroyed. If you don’t have suf­fi­cient insur­ance, your insur­ance com­pany may only pay a por­tion of the cost of replac­ing or repair­ing dam­aged items. Here are a cou­ple of tips to help make sure you have enough insurance:

1. For a quick esti­mate of the amount to rebuild your home — mul­ti­ply the local build­ing costs per square foot by the total square footage of your house. To find out the build­ing rates in your area, con­sult your local builders asso­ci­a­tion or ask your insur­ance agent to pre­pare an esti­mate to guide you.
2. Fac­tors that will deter­mine the cost to rebuild your home:
   1. The age of the home
   2. Local con­struc­tion costs
   3. Base­ments & attics
   4. The square footage of the structure
   5. The type of exte­rior wall con­struc­tion — frame, masonry(brick or stone) or veneer
   6. The style of the house (ranch, colonial)
   7. The num­ber of bath­rooms, addi­tions, decks, and porches.
   8. Attached garages, fire­places, exte­rior trim and other spe­cial fea­tures like arched windows.
3. Check the value of your insur­ance pol­icy against ris­ing local build­ing costs each year. Ask your insur­ance agent or com­pany rep­re­sen­ta­tive about adding an “INFLATION GUARD CLAUSE” to your pol­icy. This auto­mat­i­cally adjusts the dwelling limit by a cer­tain per­cent­age when you renew your pol­icy to reflect cur­rent con­struc­tion costs in your area.
4. Check the lat­est BUILDING CODES in your com­mu­nity. Build­ing codes require struc­tures to be con­structed to min­i­mum stan­dards. If your home is severely dam­aged, you might have to rebuild it to com­ply with the new stan­dards requir­ing a change in design or build­ing mate­ri­als. These changes could cost more. Gen­er­ally, home­own­ers insur­ance poli­cies (even a guar­an­teed replace­ment cost pol­icy) won’t pay for this extra expense. How­ever, some com­pa­nies offer an endorse­ment (ordianance and law/increased cost of con­struc­tion) that pays a spec­i­fied amount toward these costs. (An endorse­ment is a form attached to an insur­ance pol­icy that changes what the pol­icy covers.)
5. Do not insure your home for the mar­ket value. The cost of rebuild­ing your house may be higher (or lower) than the price you paid for it or the price you could sell it for today.
6. Some banks require you to buy home­own­ers insur­ance to cover the amount of your mort­gage. Make sure it’s also enough to cover the cost of rebuild­ing your home.
7. Increase the limit of your pol­icy if you make improve­ments or addi­tions to your house.

Your per­sonal belongings

two ways to insure your per­sonal belongings:

1. REPLACEMENT COST COVERAGE — Insur­ance that pays the dol­lar amount needed to replace dam­aged per­sonal prop­erty with items of like kind or qual­ity with­out deduc­tion for depreciation.
2. ACTUAL CASH VALUE — Insur­ance under which the pol­i­cy­holder receives an amount equal to the replace­ment value of dam­aged prop­erty minus depre­ci­a­tion. Unless a home­own­ers pol­icy spec­i­fies that prop­erty is cov­ered for its replace­ment value, the cov­er­age is for actual cash value.

Here are a few other things to keep in mind when your are insur­ing your per­sonal belongings:

1. Check the lim­its on per­sonal items, such as jew­elry, sil­ver­ware, cam­eras, furs and com­puter equip­ment. If the lim­its are too low, con­sider buy­ing a spe­cial per­sonal prop­erty “endorse­ment” or “floater.” An endorse­ment is an addi­tion to your pol­icy. A floater is a form of insur­ance that allows you to insure valu­able items sep­a­rately, and insure them while they are away from your home.
2. Make an inven­tory of every­thing you own in your home and in other build­ings on the prop­erty, except your car which must be insured sep­a­rately. Write down the major items you own along with all avail­able information:
   1. Ser­ial number
   2. Make and/or model number
   3. Pur­chase prices
   4. Present value
   5. Date of purchase
3. Don’t for­get to include indoor and out­door fur­ni­ture, appli­ances, stereos, com­put­ers and other elec­tronic equip­ment, hobby mate­ri­als and recre­ational equip­ment, china, linens, sil­ver­ware and kitchen equip­ment, jew­elry and clothing.
4. Take either still or video pic­tures of these items. Attach receipts to the inven­tory when avail­able. Store the inven­tory and visual records away from your home– per­haps in a safe deposit box.

Do you need flood insurance?

Flood­ing is not cov­ered by a stan­dard home­own­ers insur­ance policy.

To deter­mine if you need flood insur­ance, ask your insur­ance pro­fes­sional, mort­gage com­pany or neigh­bors about the flood his­tory in your area. If there is a poten­tial for flood­ing, you should con­sider pur­chas­ing a pol­icy that cov­ers the struc­ture and your per­sonal belong­ings. Flood insur­ance can be pur­chased from an insur­ance agent or com­pany under con­tract with the Fed­eral Insur­ance Admin­is­tra­tion (FIA), part of the Fed­eral Emer­gency Man­age­ment Agency (FEMA). Flood insur­ance is only avail­able where the local gov­ern­ment has adopted ade­quate flood plain man­age­ment reg­u­la­tions under the National Flood Insur­ance Pro­gram (NFIP).

For a quote please call 602–242-2512 or Click here to apply now for a quote