Some Sandy Rebuilding Projects May Qualify for Insurance Discounts
As the one year anniversary of Superstorm Sandy nears, now is a good time to conduct a review of your homeowners insurance policy, according to the Property Casualty Insurers Association of America (PCI).
“Over the course of a year, particularly in the wake of Sandy, you may have made upgrades, completed renovations or purchased new items that could impact the amount of homeowners insurance coverage you need. In some instances, the changes that make your home better able to withstand storm damage may qualify for discounts,” said Micaela Isler, assistant vice president, state government relations for PCI.
Conducting an annual review of your insurance policy helps to ensure that your home and belongings are fully protected. The review provides you with the opportunity to address potential gaps in coverage. Additionally it enables you to talk with your insurance company or agent, ask questions and gain a better understanding regarding your coverage. You may be pleasantly surprised that it is fairly quick and easy to conduct the annual review.
1. Begin the process by doing a home inventory of your possessions. Your insurer may have tools available to assist you in creating your home inventory. Additionally, there are other resources you can use such as the Insurance Information Institute’s Know Your Stuff Home Inventory https://www.knowyourstuff.org/iii/login.html
2. Next call your agent or insurance company to
discuss your policy and coverage options. They can assist you in determining
the type of policy you should have and the proper amount of coverage.
3. Check whether the policy pays replacement cost or actual cash value for a covered loss. Actual cash value takes depreciation into account. As a result, the compensation received may be much lower than the retail price of a new item. Your policy should insure the structure for the full replacement cost. The replacement cost is the amount necessary to rebuild the home with construction materials of like kind and quality. Replacement cost should not be confused with market value, which is the price you could sell your home for today. In some areas, new building codes will increase the cost of rebuilding. These factors should be considered in the decision regarding how much insurance to buy. Contact your agent to adjust the amount of coverage if you’ve put on an addition or made renovations to your home.
4. It is a good idea for people to buy flood insurance because flooding is the most common natural disaster. While flooding is not covered in standard homeowners insurance policies, it can be purchased through insurance agents from the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Administration.
5. Make sure to know the amount of your deductibles. The deductible is the amount of a covered loss that the homeowner must pay. The higher the deductible, the lower the premium will be.
6. Inquire about discounts that may be available. There may be discounts for things such as security systems, smoke alarms and steps you have taken to mitigate damage from natural disasters. Additionally some insurers offer discounts for consumers who purchase multiple policies.