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Insuring Yourself for the Future

How should you review your insurance for the future?

 Insurance is the type of expense that feels like a waste of money…until it isn’t. Insuring Yourself for the Future helps when an accident or storm damage occur, you don’t want to have to worry about your insurance coverage on top of everything else. An important exercise to put on your annual calendar is reviewing your insurance coverage. Whenever your current plan will renew is a natural time to perform this simple but important audit. Here are several aspects you should review.

 Check on your payments

 For most property owners, their mortgage company will hold their insurance and property taxes in escrow and pay on the homeowner’s behalf. Occasionally mortgage companies will make a mistake in this process. It could be either through their error, the sale of your mortgage to a new mortgage company, or when the customer signs on with a new insurance company. As you review your insurance, check in with your mortgage provider as well to ensure they have the correct insurance information on file. Make sure all payments are up-to-date.

 Is your insurance coverage adequate for the current house price?

 Be sure that your insurance is based upon your rebuild cost, which may not necessarily be the same as the price you paid. If you bought your property during the housing boom, or at a  severely reduced price when the market crashed, it is important that your insurance reflects present-day rebuild prices. Your coverage may also need to be adjusted on a custom build, where the original costs may have outpaced what you would pay for mass produced components. Whichever way the benefit needs to be adjusted, you don’t want to be stuck if something happens that requires your home to be rebuilt.

 Get the right coverage for your situation

 Standard insurance policies typically do not cover damage from certain causes, such as floods, earthquakes, or septic failure. Based upon your location and situation, you may not be able to get insurance against these threats. You might pay a hefty premium, or may only find insurance through a government program. Be sure to read your policy carefully, and secure supplemental coverage as needed. Make sure your plan is commensurate with the rental rates that you are charging.

 Homeowners insurance may only be used in certain situations when renters are involved.  Sometimes you can use it if you are only renting for small periods of time or if you are renting to your family members. Rules will vary by state and insurance provider, and may depend upon factors of whether the renter is a family member, or whether there is a separate entrance. If you have a situation outside of a dedicated rental, shop around for insurance to find the right plan.

 Landlord insurance will be necessary in most cases, and provides for many of the unique situations that you could face. For example, a landlord policy may provide coverage for loss of rental income and coverage of other structures on your property It may allow you to easily and economically include additional units, even properties that are in another state.

 Are you getting the best rate?

 It’s easy to become comfortable with insurance companies. Generally you will need the same coverage year after year, so this important expense often goes on autopilot. In any insurance company, you need a reasonable rate, but you also must have confidence that they will be accessible and responsive when you need them the most. Check in with your company as well as competitors to see if you are still getting what you need from your insurer. Some companies may change coverage areas without much fanfare, so it’s important to double check what you are getting from your insurance company!

 


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