Insuring your house against financial ruin is an important step for new home buyers. It definitely isn’t one that should be taken lightly or decided on a whim. Learn from the hard-won knowledge of previous homeowners, dealing with an arduous home insurance claims process. Follow these tips to avoid headaches and the chance of a future claim you may make ever being denied by unscrupulous independent insurance adjusters and the companies they work for.
1. Keep Your Policy Updated
Many families purchase their home insurance when they buy their home, and never look back. Their insurance agent sends them the updated amounts of coverage every year, adjusted for inflation, and most people are satisfied to know that their policies are increasing in value. However, most family homes undergo a major renovation at some point, investing thousands into the new remodel. It is important to update your insurance policy after such projects, as in order to be covered for the new additions, the value should be assessed. This doesn’t mean you’ll need to get appraisers in and all that; a simple phone call or email to your insurance company with the details of the renovations and attesting that all municipal building permits and such have been obtained will suffice to get the ball rolling. They’ll let you know if any additional information is needed.
2. Keep Records Of Your Stuff
This is a bit of knowledge from an age gone-by. Back in the 80s, everyone recorded home movies on their huge camcorders, and because the setup time was more than, say, the lightning quick reflexes of a quickly snapped smart phone pic today, the video tended to be drawn out as well. That’s why we have so many VHS tapes of birthday parties lying around. But these serve another purpose! They have recorded the contents and finishes of your home.
This can be used as part of a ‘proof of loss’ should you need to make a home insurance claim. Now more than ever, this can be done with ease, and it’s a shame that more people aren’t taking a proactive stance. Take video and pictures of your home and its contents with your mobile device or other recording equipment, giving added screen time to more expensive items (to accurately view make /model). No one likes to make lists, and although ideally a total home inventory would be advisable, the video recording will greatly assist if you don’t go that route.
This will be especially helpful in the event of a total loss, where the house may be unrecognizable. You may also be relocated to a hotel, so a lack of access could be an issue. Being able to view film, that goes through your house room-by-room, showing what your place was like, will be invaluable in producing an inventory of your losses. Once you create it, save a copy on a thumb-drive or two, and email yourself another or store it online on a server you have access to. Keep the USB key at your bank where your mortgage is located, and another copy with a friend or family member. This redundancy will save you potential headaches later on.
3. Know What’s NOT Covered
Usually flood insurance is not an inclusion provided for by most insurance policies. However, due to extreme climate change in recent times, it has become increasingly more relevant to homeowners looking to protect their investments. Flood insurance is available from most insurers at an additional premium, but even so may only cover the ‘actual cash value’ of personal items other than your dwelling (structure of your home). Upgrade to ‘replacement cost’ for flood damage where possible; this type of home owners insurance is especially advisable if you live in a low-lying area where water naturally drains.
Similarly, leaking and seepage in your foundation walls, roof, or windows, are not traditionally covered either. This is why they say ‘buyer beware’ (and why it is imperative to conduct a Home Inspection prior to purchasing a property). There are also a number of other additions you may make to your house insurance policy in order to better equip you and cater to your particular circumstances and location. Ask your insurance broker or agent which additional coverages are recommended for your locale, and at what price. If you run your own business from home, additional coverage will also be required to insure your company assets.
4. If You’re Renting, You Should Still Insure
We see it time and again, families rent rather than buy, but don’t invest in tenant insurance. Your landlord may not have possess tenant insurance (usually required by law, but not well-enforced), and even if they do, you are still legally vulnerable if other things go wrong. For example, say you accidentally set fire to the place. Or you leave the water running and end up flooding the place. The landlord’s insurance company can sue you for your negligence, and since you have no coverage, you could be on the wrong end of a rather hefty civil suit.
Protect yourself and your family if you are renting; ensure your landlord has ‘tenant insurance’ before you rent, but purchase your own as well for added security. Remember, insurance companies will do whatever they can to recoup funds they are obliged to pay out to landlords, should a peril occur. This includes suing the pants off you to get back some of that money. Your policy will also serve as home contents insurance, as will the landlord’s coverage, so you may want to talk to your insurance company about ‘liability only’ home insurance should your landlord have adequate contents insurance for you.
5. Choose Your Provider Wisely
Types of coverage are all important and always heavily talked about, but we can’t stress enough that the single most important factor in deciding on home insurance is going with the right company. Choosing an insurance provider is a big deal, so do some research before you commit. A quick Google or Bing search of the company name will reveal important aspects of their reputation. Be sure to read user reviews and ratings. You should also weigh their standings against others, using rating agencies like Moody’s, to conduct your own home insurance comparison.
An important factor, aside from their size and capability, both which demonstrate their financial ability to pay you in the event of a claim, is the company’s claim refusal record, which denotes their willingness to pay out a claim, which is likely a more ambiguous issue. These records should be available through your state or provincial insurance commission. They also keep a list of complaints against insurers of public record. The best home insurance companies have the lowest rates in this regard. Search: “(your State/Province) Insurance Commission” and give them a call to inquire about your chosen candidates.
We hope you gleaned some valuable insight into the complicated world of insurance through this article. For more, simplified information, tips, and home owner insurance knowledge, visit us at HomeInsuranceDiary.com