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10 Important Questions for your Homeowners Insurance Provider

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.

 7)  Additional Structures...(Pools, Decks, etc.) – In our case we had coverage for additional structures which included our pool and our decks. If you ever came to our house there was a lot of decking. Unfortunately we did not insure these items for the amount that it would cost to rebuild them. (Most people don’t think about these things until it actually happens.) That is one thing that I would change if we had it to do all over.
8) Content coverage.  It was an add on for us (USAA) and thank heavens we did.  What do you need as proof for contents?  Be sure to take pictures of EVERYTHING in your house, clothes included.  It will help for proof and also to jog your memory should you have to itemize everything you own.  Also, there are different requirements for different situations – disasters like this one our insurance didn’t question anything and gave us 75% of the insured value of the contents (but this payout level varies widely from different insurers)… but in the case of theft, I think that the requirements for proof are very different.
9) Displaced living allowance.  Basically, if your house is destroyed or made un-livable, this is money to pay for housing until you can get a house rebuilt or cleaned up/repaired enough to move back in.  In our situation, USAA was willing to pay out a lump sum, which we used to buy an RV with – but from talking to other folks, this is NOT typical.  Be sure to add this on to your policy and know what is allowed before you get in this situation.

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….

Better safe than sorry… and in this case, you might be REALLY sorry if you’re not properly covered.  Hopefully, the sky will never fall for you but if it does…you’ll be happy that you paid the few extra dollars for the right coverage.
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One response »

  1. Oh this info is SO HELPFUL! Thank you VERY MUCH for taking the time to post this… there are so many things in your list that I NEVER would have thought of!

    The only thing that I might be able to add that I’ve learned the hard way & that might help one of your readers in the future is

    11) Does your coverage include clean-up/repair/replacement for losses due to WASTE water back-up into your home?

    Insurance typically covers FRESH water damage from burst pipes or leaking water heaters – but may not payout for things like a main-line sewer back up, septic tank problem, or sump pump failure. We learned the hard way and now have added a supplemental ‘rider’ to our policy that covers those nasty kinds of things that you don’t usually think about.

    Reply

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