Figure out what insurance plans are right for you

Published 12:00 am Tuesday, January 29, 2013

Do you know exactly what’s in your home insurance policy? Do you know what’s covered, and for how much, in case of theft or violent weather damage? Are you missing a vital insurance rider or plan, leaving you vulnerable to financial disaster? Too many people assume their plan is all they need, or all they can get, and don’t take an essential step: assessing their insurance plans on a regular basis.
Most insurance companies offer a free policy review during which your insurance representative will walk you through each element of each of your insurance coverage plans, such as home, life, disability, renters and other types of plans. This allows them to clarify what coverage you have and at what deductible and which upgrades or additional plans you need or could benefit from having. Your life may have evolved significantly since you first arranged for home and car insurance. You might have gotten married or had children; at this point you might decide to get life insurance as well. A full and in-depth insurance policy review meeting will enlighten you about your plan’s inclusions and costs and can lead to greater peace of mind when you, your home and belongings are better protected.
Some things to consider about your insurance policies:
• Storm damage: How much would you be reimbursed in the case of a hurricane and which types of storm damage are included? When you know you would be eligible for enough money to replace a furnace ruined by a sump pump failure, you may feel a little bit of relief knowing you won’t have to pay for the entire new furnace if the pump fails in your basement. The same goes for storm-broken windows and damage to your roof from falling branches. If a tree limb falls on your car, you could recoup the costs of repairing it.
• Electronics: Find out how much you could recoup in losses for big-screen televisions, home computers, laptops and other electronics. Some standard policies only cover up to $1,000, which may be the cost of one of your five home computers, so exploring an upgrade to this coverage may be high on your priority list.
• Fashion: Your insurance company might provide coverage for a certain amount of value in your designer clothing or shoe collection. In case of theft or disaster, your designer shoe collection could be somewhat replenished.
• Jewelry: This is a big one. Your early insurance policies might have covered your engagement ring and wedding bands, but as time passed, you may have acquired additional jewelry as gifts or inherited valuable diamond and precious metal jewelry. At your insurance policy review, you’ll be encouraged to take an inventory of your jewelry, get it appraised by a high-quality appraiser and insure your jewelry collection on a regular basis.
• Appliances: When you originally created your home insurance policy, it might have been when you were making breakfast in your old kitchen, prior to the $15,000 remodel you completed a year ago. Without an upgrade to your home insurance policy, you could be vulnerable to enormous financial losses if anything were to happen to your home.
• Liabilities: It’s been said that people are far more litigious these days, so protect your home and your assets from, say, a lawsuit filed by someone who slipped down your front stairs after a party or fell on some ice on your sidewalk. Ask your insurance representative how you’re covered in case of anyone’s personal injury on your property, as well as when you have a passenger in your car.
• Renters insurance for college students: This is one that many people don’t think to ask about. When kids live off-campus during their years at college, any stolen laptops could be covered by a good renters insurance policy. Ask what your company’s renters insurance policy includes so that you’re not stuck with big financial losses due to whatever happens at your college student’s residence.
• According to the National Association of Insurance Commissioners ( more than half of all homeowners don’t have a current home inventory of their possessions, putting them at risk of inadequate home insurance coverage. Of the 59 percent without current home and valuable inventories, 48 percent of homeowners don’t have receipts, 27 percent don’t have photos of their property and 59 percent haven’t updated their inventory lists in more than a year.
• This lack of inventory creates an enormous risk of loss, not just from theft, but also from natural disasters and severe weather, which the NAIC says affected over 80 percent of the U.S. population in the past six years.
• Your insurance company likely has a spreadsheet or software, or old-school fill-in-forms, to help you complete a full and detailed home inventory. Go one room at a time to keep yourself organized and to avoid fatigue. Record model numbers, prices paid, dates purchased and any additional details, and take photos of each of your valuables. Create a special folder or storage box for your insurance information and use this inventory as an important tool during your insurance review meeting to help you cover your assets well.