You want to live on the coast and that’s settled. It is now the time to guard your biggest investment; insurance providers will not write a new policy if a named storm is active in your area. Besides, policies usually required 30 days to activate, the sooner you get coverage the better. Here are some secrets to insurance policies.
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Get maximum flood protection. If you are in a flood zone or an area susceptible to hurricane and strong storms, buy the maximum amount of flood insurance. If you are buying in a designated flood zone, your mortgage lender will require you to purchase flood insurance when you buy your home anyway. The National Flood Insurance Program-the federal government is the only agency offering this type of leverage-allowing you to purchase up to $250,000 in flood insurance for building and additional $100,000 in coverage for personal property. If you want your flood insurance to cover the content of your home, you will have to pay a higher premium. Your possessions should also be insured for replacement cost. “Actual value” coverage would leave you underinsured; you would only be paid the depreciated value of your lost items, not for the replacement of the items. Keep current inventory list of your household contents in a safety deposit box.
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Buy adequate coverage. Get a policy based on what it would really cost to buy or build a comparable home in case of fire or natural disaster. Make sure the full reimbursement amount for rebuilding covers the cost of meeting ordinances or codes that have been added or updated since your home was originally constructed. If your policy puts a limit or excludes ordinance or code changes ask for a new policy. You may need to buy a separate wind policy if your home could be damaged by hurricane winds. Verify that your policy will cover your living expenses in case you need to rebuild. All homeowner policies pay the cost of temporary living away from home including rent, hotel bills, and restaurant meals, but coverage varies. If you still owe the bank, you will need to pay the mortgage each month (even if your house is gone). Would the amount you will receive from the insurance company allow you to live comfortably? Adjust the current coverage as needed.
Study and review your homeowner policy with your insurance agent in order to get proper coverage is another way to protect your home and your investment. When a natural disaster threat is hovering within a certain number of miles, it is too late to start thinking or buying insurance. Now is the time to buy, review, and update your homeowner policies and to make sure that you are insured. |
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