Covering your Butt with Homeowners Insurance

Posted January 21st, 2010
by HomeownersInsurance.org Staff (no comments)

jeansGetting homeowners insurance is easy enough. You call up your insurance agent or log onto a website, pick the cheapest price, pay your premium and you’re settled.

Unless, of course, you actually have to make a homeowners insurance claim. Then you’re completely screwed. You didn’t pay attention to what your policy actually does – you just wanted to get coverage enough so that the mortgage lender would agree to close the deal. Now, you’re stuck with potentially thousands of dollars of repairs to make and no way to pay for it.

Fortunately, you can avoid this kind of situation. Taking a few minutes to think about the kind of homeowners insurance coverage you need can save you tons of time and money down the road.

Here are things you can do to make sure you have adequate homeowners insurance coverage:

  1. Review your policy annually. When you get your yearly renewal notice, talk to your agent. Ask if she can come out to see if you need to make some adjustments based on remodeling or expensive purchases.
  2. Don’t skimp on the replacement cost. Many Americans are underinsured, plain and simple. You need to figure out what it would take to build yourself a new house like the one you have today from the ground up. The insurance company will suggest a replacement value, but you should consider an independent appraisal to get a good feel for it.
  3. Remember your contents. The possessions inside your house add up quickly. Between your plasma TV, your laptop and that nice new dining room set you bought, you need to make sure you have adequate coverage on the contents.
  4. Know the specifics. Don’t assume you’re covered for things like storm damage, mold problems or flooding. Check the language in your policy and add riders for specific types of coverage you’d like to have.
  5. Protect yourself. There are two aspects to this. One is to never let your policy lapse. Make sure your payments are correct and on time. You should also keep a copy of important policy paperwork in a fireproof and waterproof safe. It wouldn’t hurt to have pictures of the contents of your home, too.

Photo via bluryee

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