Prepare your home for winter weather - Part II

Homeowners insurance is a package policy that covers the dwelling, outbuildings, personal property, and also provides personal liability protection The policy is a lengthy document that describes coverages, exclusions, restrictions, limitations, and conditions. Insurance is not designed to cover all losses, so review the policy to find out what is and is not covered. For example, most standard homeowners policies provide 'all risk' coverage on dwellings with exclusions for losses caused by earthquake, flood, and more. Personal belongings, on the other hand, are covered for losses like fire, wind, theft, etc. that are specifically listed in the policy. Limitations apply to pricey belongings like jewelry, silverware, artwork, computers, etc. Be familiar with policy exclusions, restrictions, and limitations. Identify your insurance needs, and look for gaps in coverage. Insurers offer a variety of endorsements that tailor policies for individual needs. Talk to your homeowner's insurance agent about additional protection as needed.

Review the policy's loss settlement provisions. Standard homeowners contracts typically provide 'replacement cost' coverage on dwelling losses. This means age or wear and tear do not affect the claim settlement. Personal property losses on the other hand, are depreciated. Look into buy-back endorsements that expand loss settlement provisions.

Make sure the dwelling coverage limit is sufficient. Homeowners insurance is based on replacement cost, which is the amount to rebuild the structure using materials of like kind ad quality. Replacement cost is based on square feet, number of stories, construction materials, foundation, and extra features. Ask your homeowners insurance agent to help you determine the replacement cot of your dwelling. It is best to insure your home for its full replacement cost. Most policies require a dwelling limit that is at least 80% of the home's replacement cost. The figure may be higher if the policy provides guaranteed replacement cost coverage on the dwelling. Insuring your home for less than its replacement cost becomes a problem when a loss occurs. Under-insuring your home may result in a reduced claim settlement that is far below the cost to rebuild or repair damages.

Confirm the policy provides enough personal property insurance protection. Most people have more belongings than they realize. A personal property inventory is a great way to assess how much contents coverage is necessary. Create a room-by-room record that describes each belonging. Be as specific as possible, including year, make, model, serial number, value, and receipts whenever possible. Keep the inventory in a safe deposit box, or secure off-site location. It will be an invaluable tool for identifying and valuing personal property damages if a loss occurs. Total the value of your possessions, and compare this figure to the contents coverage limit Get in touch with your homeowners insurance agent if more coverage is necessary.

Liability is an important, but often overlooked part of the homeowners insurance policy. It pays when you, your family, or your pets are responsible for injury to others or damage to their property. It also covers legal fees. Exclusions and limitations apply to liability coverage. For example, inform your homeowners insurance agent if you have a swimming pool, trampoline, pet, or home-based business. Failure to disclose this information may jeopardize coverage. Choose a liability limit based on your financial assets.

Finally, review the policy declarations page. The declarations page lists identifying information including the policy number, effective date, your name, address, lien holder details, policy limits, extra coverages, and more. Be certain the information is accurate.