Keep Your Homeowners Insurance Up to Date
When you sign up for a homeowners or condominium owners insurance policy, you take the first step in protecting what may be one of your largest assets. It is important to be knowledgeable about the appropriate amount of coverage needed and the extent of the coverage provided by your insurance contract.
The homeowners policy is a package that covers your dwelling, other structures on the premises, unscheduled personal property on and away from the premises, loss of use, personal liability coverage, and the medical coverage of others.
Nearly all insurance companies require that your policy be issued for at least 80% of the replacement cost of your home. Failure to maintain proper coverage may result in sharing in a partial loss as a penalty.
The correct amount of coverage is determined at the time the policy is written. Then it is your responsibility to be sure your policy continues to provide appropriate protection. Most insurers will increase your coverage by a certain percentage each year to keep pace with inflation. However, it is important for you to periodically review your homeowners coverage and make any necessary changes that result from inflation in your area and adjust for additions or improvements made to your home.
Your homeowners policy also provides protection for the contents of your home. It’s a good idea to keep an inventory of personal property in a safe deposit box so that, in the event of a loss, you won’t have a problem listing the items to be replaced. The contents portion of your policy has specific limitations on items such as money, jewelry, furs, silverware, artwork, and securities. Be certain to refer to your policy for a full description of the limitations. In some instances, you can buy additional coverage if the basic coverage is insufficient.
When selecting coverage, evaluate the different policy forms. You can choose between a basic broad form policy that protects you against a list of named perils such as fire, hail, lightning, wind, explosion, and vandalism or an all-risk policy that protects you against all losses except those specifically excluded in the policy. The exceptions include: damage by birds or insects; wear and tear; landslide and earthquake; cracking from settling; flood and surface water; and damage by domestic animals or rodents.
You may wish to consider a higher policy deductible and elect to purchase the slightly more expensive all-risk contract with the premium saved. In addition to protecting your property against serious loss to the physical structure, your homeowners policy may also provide protection for legal liability in varying amounts.
In view of sizable legal awards that can potentially be granted, you may wish to protect yourself even further with a personal umbrella policy.
As you assess your coverage requirements, keep a sharp lookout for ways to you’re your premiums. By installing smoke detectors, fire extinguishers, deadbolt locks, or a central alarm system, you can reduce your costs by a reasonable amount. Evaluate your coverage limits periodically and make changes when appropriate.
As always, if you have any questions about homeowners insurance, please reach us any time at (833) 888-0534 x2 or info@westbranchcapital.com
You might also like our New (and Old) Tax Breaks for Homeowners article.
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The views and information contained in this article and on this website are those of West Branch Capital LLC and are provided for general information. The information herein should not serve as the sole determining factor for making legal, tax, or investment decisions. All information is obtained from sources believed to be reliable, but West Branch Capital LLC does not guarantee its reliability. West Branch Capital LLC is not an attorney, accountant or actuary and does not provide legal, tax, accounting or actuarial advice.
About The Author
Ayaz Mahmud
Ayaz brings almost thirty years of investment management experience to West Branch Capital. He serves as the firm’s Chief Executive Officer. Ayaz founded West Branch Capital in 2004 after spending over twenty years as a top wealth advisor at premier global investment banks: Kidder Peabody, Smith Barney and Lehman Brothers. At Lehman Brothers, he helped build the Wealth Management Group in Boston and co-managed the Equity and Fixed Income Middle Market Institutional Trading Desks. Ayaz has managed client portfolios throughout his career. Ayaz holds an M.A/M.B.A and a B.A/B.S from Syracuse University.
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