Fire Insurance
Insurance agents report that many homes today are underinsured for multiple reasons, but the top two include:
* Insurance companies fail to update real estate home owners policies
* Home owners neglect to updates their homes coverage to keep pace with
increasing costs of labor, construction materials, and replacement of personal
household goods and possessions.
Under most homeowners policies the replacement cost of the home itself is fully insured. Mortgage companies require that borrowers have, at a very minimum, enough insurance to cover the value of their loan. And most homeowners go beyond that, opting for insurance that will pay to rebuild a house from the ground up.
But there could be problems.
Unless you buy an insurance policy that specifically covers the cost of replicating a historical homes original beauty, your insurance may not pay to replace handcrafted crown moldings or elaborate stained glass. Under a standard policy, your home will be replaced with standard building materials.
If you upgraded your home but not your insurance, your insurance claim may not be enough to replace those renovations.
Rebuilding costs have soared far above the replacement costs. Depending on your homes location, costs can run anywhere from $50 per square foot to $300 or more.
Here are some useful tips to determine if your fire insurance coverage is adequate.
* Check your policy to figure your replacement cost limits
* If your fire insurance policy's cost seems low, ask your agent to increase
your limits to not match today's rising building costs, but for projects
costs a few years down the road.
* Get several square foot estimates on the cost of rebuilding your home
from reputable contractors.
What Was In Your Home?
When a fire consumes your home, you are asked to make a list of all your assets. During a crisis, it is difficult to remember everything. Keeping important papers, jewelry, family heirlooms in a safety deposit box can guard you against losing items that are very important. Also remember to keep an inventory within your important papers. This can help you, not only in a fire, but for burglary purposes, as well.
To start your inventory:
* Go through every room, listing costs, date of purchase, receipts, and
replacement costs
* Include model numbers, brand names, any other identifiable identification
* Videotape and/or take pictures
Sherie says: Remember, I'm here to guide you through the entire real estate process!
