Insurance

HouseAn insurance policy on your home can cover such losses as fire or lightning, explosions, aircraft, smoke, falling objects, freezing or plumbing, heating, air conditioning or other such household systems, earthquake, windstorm or hail, riot or civil commotion, vehicles, theft or vandalism, weight of ice, snow or sleet, flood, sewer back up.

There is no need to insure the land on which the home is situated. However, the lender will require insurance on the home. You should obtain insurance on your personal belongings.

Should your home be destroyed or damaged or if you are robbed, it is very hard to remember every item you have acquired over the years. I highly recommend you take each room and list the items in the room. I recommend you write down everything you own. A good format is to put the item, serial or model number, year purchased and purchase price. This can easily be done with four columns across a page. It is also good to take photos or a video of each room. It is imperative you update this list annually. The most important thing is to have the list away from your home. Have a family member or a friend keep the list and your video or photos.

Actual cash value may be a little cheaper monthly, but it is not the best choice. Just like a car, your personal belongings depreciate in value the minute you use them. You may have purchased a sofa for $400 this year. If you lost the sofa it would only be worth the value that day. If it has stains or rips, it may only be worth $100. Under an actual cash value, the insurance company would give the lower amount and you would be hard pressed to purchase another sofa for $100.

Replacement coverage may cost a little more per month, but should you need to file a claim on your insurance, you would receive the larger amount under the replacement coverage. Under this method, you would have your belongings back into your home or another habitat much sooner.

You will want personal liability insurance in case someone is injured or hurt on your property. It is recommended you carry $250,000 of liability coverage.

You should discuss your insurance needs with a reliable agent. The best way to find a good agent is a referral from a friend or a family member.

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