One kind of home security that is too often neglected or postponed until it is too late is adequate and appropriate homeowner’s insurance. But without the right kind of coverage and without knowing how to comply with the terms of the policy is it possible to wind up on the other side of an unexpected accident, natural disaster, or other calamity with little to fall back on for financial relief.
You should get proper coverage, and update it ever so often. You should know what the basics are, how to get the best deal, and what is usually not going to be covered under most policies. Then you should take steps to make sure that when disaster does strike you are prepared for it and can deal effectively and professionally with your insurer to ensure you get treated fairly and compensated appropriately.
Here are some tips to help accomplish all of that:
Understanding the Policy
These days, typical insurance policies are crammed with legal language, special clauses, and page after page of restrictions and policy guidelines. A single homeowner’s policy can often be the size of a small novel, and very few homeowners ever bother to read the description of what their policy covers. Even if they do bother to read the documents it is unlikely that they will have a clear idea of what is contained in the policy unless they themselves are an insurance broker or have a pretty advanced law degree.
That’s why it is a good idea to sit down and have an in-depth discussion with your insurance broker and get them to explain the policy to you at least once. It might take time, but after you have a thorough grasp of the document then it will be easy for your broker or agent to explain any subsequent changes, waivers, or new policy conditions. If your broker can’t answer all your questions to your satisfaction or isn’t keen on the idea of taking time to teach you what the policy means, you may want to shop for a different insurance provider.
Getting the Best Coverage at the Best Price
Cheap is not always least expensive when it comes to insurance. One of the main reasons is that companies that offer bargain basement rates often go out of business because they can’t compete. You should shop for insurance offered by companies with the highest ratings, because they are the ones most likely to survive over the long haul. “AAA” means super strong, whereas “AA” means very strong. Companies with “A minus” ratings, on the other hand, are strong and those with “B plus” ratings are not quite as financially equipped to deal with lots of big claims in the wake of a widespread catastrophe. So be sure to shop not just by price alone, but also by industry credit ratings, to make sure that you get adequate coverage from a reliable firm.
Also shop for discounts because if you are a senior citizen, a nonsmoker, or have multiple policies with the same company you may be entitled to preferred customer rates. Another way to save money on insurance is to minimize your claims. That may not seem fair, but it is how the industry operates. If you have a history of claims then your premiums will probably go higher, whereas if you are able to remedy the problems yourself you’ll enjoy less expensive insurance. In some cases frequent claims can even result in getting dropped by an insurance company, and nobody wants to face that possibility.
Your claims history follows you around, too, because with sophisticated insurance company computer records and data sharing any company can check up on you and see if you have a history of claims. They can also run the property address for the same kind of profile, so you might want to have the history of a home checked by your insurer before you buy real estate.
What Won’t Usually Be Covered
Damage that could have been prevented through more responsible home maintenance may not be covered. So if a tree falls on your house but the insurance investigator finds out that it was dead or rotten before it fell, that’s a problem. In all likelihood your claim will probably be denied.
Damage from insects like termites is not usually covered, either, and neither is toxic mold damage. So have your home inspected, look for trouble areas, and have them addressed before you have a serious problem.
Similarly, home office equipment may not be covered because it is considered part of a commercial enterprise. For your home office you will probably want to get a business or commercial policy, but at least the extra cost of that coverage can probably be itemized as a legitimate business expense for tax purposes.
What to Do to Prepare for a Successful Insurance Claim
Take photos of your property or videotape footage of it, and update that visual record any time you do home improvements. Photograph any damage you find that may require a claim, and use your camera settings to add a date and time to the picture so you have proof of when it occurred. If there is damage, do emergency repairs as needed to keep it from getting worse – but always contact your insurance company ASAP and follow their recommendations. In your policy there should be a section called “Duties after a Loss” and you’ll need to be familiar with it to know your responsibilities so you don’t accidentally spoil your chances of a settlement or claim.