You feel like calling your mom
Yes, It’s hard to stay calm,
As the cost of insurance rises
Does your policy cover you from surprises
Or does it have a ticking time bomb?
Your home stands as one of the largest investments most of us will ever make. So, the insurance we have to cover it is equally important.
If you’re like most homeowners (including me) you seldom think twice about your insurance policy - except when you get the monthly bill. Right?
But did you know with the winter months approaching fast, your risk of loss due to damage increases. Because of the risk of flooding, hurricanes and other unpredictable winter-related accidents, it’s important to review your policy.
I’ve discovered many people shocked to find what I call ticking time bombs in their home insurance policies. What are ticking time bombs you ask? Ticking time bombs are those exclusions in your policy you thought covered you - but didn‘t.
Knowing what you’re covered for and what you’re not covered for can make all the difference if a disaster strikes.
I’ll review 3 ticking time bombs in many home insurance policies. The goal here is to make you aware of them so you can be a more intelligent consumer.
Here are 3 Ticking Home Insurance Time Bombs and Suggested Solutions.
1. Actual Cash Value Coverage.
This is a ticking time bomb because you’re only covered for the cash value of your property minus depreciation. For example if a tree fell and damaged your 10-year-old roof, the depreciation calculated in would lower your payout.
With the rising cost of building materials and labor you could come up short should you have to rebuild your home or other part of you property.
Suggestion: Check your policy and make sure you have replacement cost coverage. While a bit more expensive you’re covered for what it would cost to replace the damage at today’s prices. For more information on this subject Click Here!
2. No Flood Insurance.
Surprisingly many homeowners find out too late each year, especially during the rain and hurricane season they have no flood damage coverage.
Nearly every policy in the U.S excludes coverage for damage by “rising water”. Statistics from the National Flood Insurance Program show one in four claims were paid to homeowners in low- flood-risk locations.
Suggestion: The NFIP (National Flood Insurance Program) is the only way for most people to buy flood insurance. Flood insurance is a good idea to write into your budget (at least for the winter season).
Remember one of the tragedies of Hurricane Katrina homeowners was many had no coverage for flood damage.
Statistics from the N.F.I.P confirm most uninsured people who experience home flooding never fully recover financially. For more information contact your insurance agent.
3. The Use it and Lose it Home Insurance Trend.
A new trend on the horizon was revealed by a CNN report dated June 2005. The Report states how more insurance companies cancel policies of homeowners located in flood and hurricane prone locations. But now non-renewals are beginning to spread outside hurricane and flood prone areas too.
A 2003 study conducted by the Independent Insurance Agents & Brokers of America (IIABA) showed nearly 2.5 million Americans lost their coverage during the previous two years. So beware, filing too many claims can put you in jeopardy of non-renewal.
Suggestion: Bundle your insurance coverage. If you have auto and life coverage combined with your home insurance, many will think twice before canceling your homeowners policy ... and risk losing your other business.
Also take the time and effort to apply preventive measures to avoid accidents in and around your home. For more details Click Here!
These are the current potential ticking time bombs concerning your home insurance coverage. Take the time to diffuse these ticking time bombs by following the suggestions. You’ll sleep a lot better knowing your precious home is fully covered during this wet, windy and unpredictable winter.
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