When we bought our house 2 1/2 years ago, my husband was nervous about the insurance. We decided to go with USAA since we could (have to have been in the military, or your parents, to join) and their reputation is better than most. That said, our mortgage provider only required that we insure the HOUSE – and nothing else.
Fortunately, hubby is a paranoid guy and decided that the $100 or so extra a year to add on the “extras” was worth it. Right now, we owe our future to those extras… We got lucky – we had adequate coverage BEFORE the disaster… but some of our friends who lost their homes weren’t as lucky. Other friends, who had to evacuate but still have a house, they’ve since found out that their coverage was not what they had thought.
NOW IS THE TIME TO REVIEW YOUR COVERAGE WITH YOUR INSURANCE.
Seriously. Do it NOW. You never know when the sky might fall and if it does… the extra money spent now will be returned in spades.
And if you’re stupid enough to not have insurance at all… well… PLEASE go get coverage now.
So, a few of us moms in my local Mom’s Club were talking via email about what sorts of things you should check on to make sure you’re covered in your insurance. Again, this is just stuff we’ve learned by going through it ourselves, we’re by no means official experts but… (Thanks to Tracey and Stacey for the questions other than the 3 that I added to the list!)
1) Tree coverage, from $250 to $500 per tree. Not trees dead from the drought, but ones that were destroyed through acts of nature. Do they pay this to you as a separate coverage, or is it included in your total house coverage?
2) Smoke, Flood, Hail, Vandalism, etc type damage. Where do you stand with coverage if it is not a total loss? What is your deductible? Do you have that same deductible if it’s a total loss?
3) Clearing the lot of debris and sometimes foundation slab replacement where a home is a total loss. Are these paid as extra, or included in your total house coverage? Quotes I’ve seen: $10,000-$14,000 for clearing the lots of debris, and another $10k-$12k for slab removal.
4) Jewelry has a cap on coverage, unless you have it covered separately as an add-on for theft only or on an appraised amount in order to have other reasons besides theft included. These caps can be as low as $500, which doesn’t even cover a wedding ring usually. If you are wearing it regularly, perhaps you don’t mind if it’s covered or not. If you don’t have an add-on policy, and it’s a big value piece, make sure store it in a fireproof safe all the time. (Or my preference – take pictures of the items after they’re appraised and place in a bank safe deposit box.)
5) Replacement Value for the House. If your house is a total loss, and your total coverage is only the value of your house as if you were to sell it, is that really a proper coverage level for you? If clearing the lot, foundation replacement and tree removal coverages are INCLUDED in your total coverage amount, and not paid out separate, you are down by $20k or more right off the bat. If that’s the case, consider a total coverage amount as high as they will let you, as close to a $90 to $100 per sq ft rebuilding price as you can get it. In checking with builders, that is how much is costs you today to rebuild your home on average. It will put you closer to a true cost amount if you had to clear your lot and rebuild.
6) Cost to Rebuild – When coming up with the coverage on your home structure, you may want to consider not only what you could resell your house for but also what it would cost to rebuild that structure. In our case, those numbers were quite different.
10) Pets. Does your insurance cover boarding of pets while you’re out of the house? Ours didn’t… also, medical expenses for pets caused by the disaster. Our cat is STILL at the hospital and if not for the vet giving a huge discount….