Ready for Severe Weather? (Part 2)

Homeowners insurance review tips:

  • Verify your home's replacement cost. Replacement cost is how much it takes to rebuild the house using similar materials. Compare this figure to the policy's dwelling limit and adjust as needed. Insuring below replacement cost may reduce the claim offer and leave you without enough money to fix the damage.
  • Evaluate your personal property insurance needs with a room-by-room inventory of belongings. Compare the policy's personal property coverage limit to the total value of your belongings. Talk to a local insurance agent if additional coverage is in order. Ask about insurance for unique, high-value, or unusual items too.
  • Note the policy deductible and loss settlement terms. Structural damage is typically settled on a replacement cost basis, which is the amount to repair the damage. A total loss settlement for damage to your home cannot exceed the policy's dwelling limit. Personal property losses are typically resolved on an actual cash value basis, which means depreciation reduces the claim offer. Many insurers offer buy-back endorsements that broaden loss settlement terms.
  • Be familiar with losses that are not covered by your homeowners policy. For example, water damage from a sewer or drain backup is excluded. Flood-related damage is not covered either. Talk to a local agent about securing protection for these and other risks that may affect you. Flood insurance is available only as a separate, stand-alone policy. There is a 30-day waiting period before coverage begins.
  • Check policyholder duties following a loss. Among these: notify the insurer of the loss as soon as possible, protect the property from further damage, cooperate in the claim settlement process, provide a list of damaged personal property.

Auto insurance review tips:

  • Comprehensive coverage pays for damage caused by fallen tree limbs, blowing debris, hail, or flood water. Verify which vehicles have comprehensive coverage and note the deductible.
  • Liability-only policies pay for the other driver's damage if you are legally responsible for causing a car crash. This type of policy does not cover repairs to your vehicle.