What you need to know about your policy in case of a disaster
Over the last few years we have watched many natural disasters destroy homes and possessions in communities around our nation, and it seems like these events are happening more and more frequently. It has been devastating to watch so many lose so much and has highlighted the importance of staying on top of your homeowners insurance policies.
You never know when these events will happen, and it isn’t always the result of a natural disaster. Home fires, floods, and break-ins occur every day, and it’s in your best interest to be informed about what your policy covers and how it works in the event of a loss.
Are you confident that everything in your home will be covered if a catastrophic event occurs?
The first thing you need to do is find out what type of homeowners insurance policy you have and what it specifically covers. The most basic homeowners insurance policies, called HO-1 policies, cover you for damage to the structure of your home but normally don’t cover the contents of your home.
The more comprehensive policies, HO-2 and HO-3, will cover damage to your home from a wider range of catastrophic events and also will generally cover the contents as well. The bottom line is that you need to read your policy or ask for a review of your policy with your insurance agent to make sure you clearly understand what is covered. If your personal belongings aren’t covered, we strongly suggest that you research and upgrade your policy to one that includes coverage of your personal belongings.
Did you know that you need a complete inventory of all your belongings to provide your insurance company?
It makes sense that in order to replace everything that’s damaged or destroyed, you must know what was there in the first place. In the emotional weeks after a catastrophic event, it will be difficult to remember the contents of every drawer, cabinet, closet, and garage shelf. That would be a difficult task on the best of days.
Protect yourself now by preparing a complete inventory of your home — with the help of technology. UPHelp Home Inventory and Encircle are two apps, both available on iPhone and Android, that help you catalog the contents of your home so that you can be compensated fairly for everything in the event of a loss. It’s important that the pictures and videos you take are saved on a cloud-based storage system so they are safe and accessible if your home is destroyed.
Did you know that your compensation from a disaster could be less than half of the policy value?
Depending on the insurance carrier and the wording of your policy, your payout for a loss may be less than what it would cost you to replace the contents of your home. The terms you need to look out for are “actual cash value” (ACV) versus “replacement cost.”
ACV means that you would be compensated for the value of your possessions at the time of the incident. In general terms, it means the price that the items might be worth if sold second hand. Replacement cost is a preferred coverage option because it reimburses you the cost to replace your belongings with brand new items. You definitely want to make sure that your policy has this type of coverage.
Be smart about the risks and make sure you are prepared for the unexpected
We hope that you never have to experience the complete and total losses that we have seen in recent wildfires and floods. However, even in a smaller scale crisis such as a break in or a kitchen fire, the REALTORS at Steinborn & Associates want to make sure all of our customers are fully covered to completely restore their homes and replace their possessions.
Your homeowners insurance should give you peace of mind now — and total coverage in the event of a disaster — if you follow these tips:
- Be prepared with an up-to-date list of what’s inside your home.
- Take pictures or videos on your smartphone and update your records at least once a year. Record contents of all rooms including closets, drawers, and cabinets and store the files in a cloud-based storage system.
- Keep a spreadsheet of important items and their purchase values saved in your cloud-based storage as well. Update it annually.
- Ask your insurance carrier to review your policy with you so you understand your coverage, and find out what they require as documentation in the event of a claim.
Are you looking for a REALTOR who will help you each step of the way? Check out our team of expert REALTORS who are ready to help you either find your dream home or sell your home quickly and easily. We offer the most extensive online listing sites to help you achieve your goals.