Check that insurance policy : Rooftop Views

Rooftop Views

Check that insurance policy

When you purchased your home you also purchased a homeowner's insurance policy to protect the dwelling and the contents in case of fire and other disasters. Chances are you haven't checked it since.

Is the insurance company still highly rated? Has that company paid recent claims in a timely fashion without hassle? Sometimes the cheapest plan isn't the best plan.

Make sure the company will still cover your home. In Colorado there are places of high fire danger where companies are reluctant to renew policies or to write new ones. If your policy is carried by one of these companies you may want to consider switching. Obviously places like Florida and the Gulf Coast have their own issues.

Are you familiar with the liability portion of your policy? Do you have an ACV (actual cash value) policy or a replacement cost policy? One type will allow you to replace your home as it was at the time of loss. The other will give you a check for the amount of the policy and you'll be on your own trying to find a new home for that price.

Be sure you're carrying the right amount of insurance. It's not a bad idea to have your home appraised every few years to make sure your insurance coverage is sufficient.

There are generally three mistakes that homeowners make:

They try to be dishonest on an application. Saying you live in a rental property is automatic grounds to reject your claim.
People fail to list detached buildings on their policies. This could be a garage, a barn or a work shop. Failure to list them may mean they won't be covered in case of loss.
Most importantly, people cover the entire value of the property rather than the dwelling or detached structures. The dirt will still be there in case of a disaster. Save yourself some money and don't insure the ground.

Finally, if you have remodeled your home and increased it's value, make sure you have increased your homeowner's coverage to match.