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Time to review your homeowners insurance policy

posted Jan 7, 2014, 7:32 PM by Dottrio LLC   [ updated Mar 26, 2014, 9:55 AM ]
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The typical homeowners insurance policy will provide coverage for numerous perils but is it enough coverage for your needs? The answer to this question is almost always a resounding NO. The new year is a great time to review insurance coverage and make changes as necessary. Insurance policies can be confusing so you may benefit from the assistance of a licensed professional such as a Public Adjuster or Insurance Agent as you review your coverage. Most Public Adjusters and Insurance Agents will review your coverage at no cost to you. Be advised that Insurance Agents may view this as an opportunity to "enhance" your coverage which will increase your cost and as a result increase their commission. You should carefully consider your options before making major changes to your homeowners insurance. Buy the most insurance you can reasonably afford and buy it from an insurance carrier that pays claims. Many of the insurance companies you see advertising on television have horrible track records for promptly and fairly resolving claims. Buying insurance from a carrier that will pay you what they owe you on claims in a fair and prompt manner is worth a few extra dollars. Most people don't know they have a bad insurer until they file a claim. Once a loss occurs it is too late to do anything about a bad insurer. A bad insurer does everything it can to avoid paying a claim or will offer settlements far below fair market value for your loss. Unfortunately many well known insurers fall into this category.

The first part of your review process should consist of determining whether you have a good insurer or not. This question is best answered through lots of research and it certainly helps to talk to a professional who handles insurance claims on a daily basis such as a Public Adjuster. Your agent is not the best person to discuss the claims payment practices of the insurance company they represent. The conflict of interest is obvious, the agent is paid for representing the insurer and will do nothing to bite the hand that feeds them. Agents often lack any real world experience in the claims process and in many cases have never filed a claim of their own. Your agent may be a nice person but they are not your best source of unbiased information. Public Adjusters on the other hand represent policy holders every day and as such are the best source of accurate and reliable information about the claims handling practices of insurers.

The second part of your review process should consist of determining if you have adequate coverage for your needs. What is the amount of your insurance deductible? Do you have different deductibles for different perils? Does your policy cover material matching? Does your policy cover code upgrades? Are expensive items such as jewelry, firearms, silverware, and collectibles accounted for in your policy? Did you know that most homeowners policies provide very little coverage for firearms, jewelry, and other collectibles? Did you know that your homeowners policy will not cover flood damage? Do you operate a business from your home and if so is the business covered on the policy? Have you remodeled recently? Have you recently added playground equipment, a trampoline, or an in ground swimming pool? Do you own high end audio and/or video equipment? Once you have answered these questions review your policy for coverage and exclusions. Your results will almost certainly surprise you. In most cases you will find that you are under insured in numerous areas.You may be disturbed to find that you have a wind/hail/tropical cyclone deductible that is a percentage of your total coverage amount. In other words a 3% deductible on a $300,000 home would mean you pay $9000 out of pocket before the insurance company pays a penny. This type of deductible is becoming common place especially for senior citizens. This type of deductible should be avoided at all costs. You should determine the claim filing deadlines for various claim types and determine if they meet your needs. For example you may have only 6 months to file a wind or hail claim. This could be a problem because damage from wind and hail may not be readily apparent to the untrained eye. You should also use this time to review the purchases of items that were made with credit cards. Many credit cards will provide coverage for theft and damage to items purchased with the card for a period of time after the purchase.

Lastly you should become familiar with your responsibilities under your insurance policy. Did you know that when a loss occurs it is your responsibility to prove the loss to your insurer? In the event of a property crime loss do you know how to obtain a copy of a police report from your local police department? Are you familiar with the insurance claims filing process? What can you do to protect yourself? A room by room photographic inventory of your valuables is an excellent way to be prepared should the worst occur. This inventory should be stored on a remote password protected computer server. A copy of this inventory should be kept on your person on a thumb drive or memory card that is also password protected or in a safe deposit box in a paper or electronic format.  The importance of securing your valuables cannot be overstated. If you are not currently storing firearms, jewelry, and other valuables in a safe you should begin doing so immediately. If your home does not currently have a centrally monitored alarm system you should address this shortcoming immediately. An alarm system with wireless connectivity or wireless back up is usually more difficult for a criminal to defeat than a system that uses a phone or cable line as its only means of communication. Each external point of entry into your home should be secured with deadbolt locks. Safes, alarm systems, and dead bolt locks will often qualify you for substantial discounts on homeowners insurance. More importantly these things should give you the peace of mind that you have done something to protect yourself, your family, and your valuables. If you would like to discuss your policy, coverage, or your insurer please use the contact us link and we will be happy to assist you. For more information about bad insurers see: Ten Worst Insurance Companies 

Have a safe and Happy New Year!

Reach us on the web at: www.dottrio.com or by phone at: 301-971-4040
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