When you think about insurance you are inclined to think about the bad things that could happen to you. These include emergency repairs at home, medical expenses, and car accidents. It may seem a little pessimistic to dwell on the “what ifs” in life, but it is still very important to protect you and your family from surprises.
When it comes to property insurance, it’s not just about theft and damage to your property; it’s about feeling secure in your home and your life in general. If disaster was to strike, your focus should be on getting your life back on track; it should never be about money. We spoke to some homeowners, and to certified financial planner Ellen Derrick, about the 11 most important things you need to know about your home insurance. The latest development will be The Reef at King’s Dock. More info with regards to the development can be found here at https://thereefatkingsdock.condo.com.sg/. The development is located near to Vivocity at Harbourfront Avenue by Keppel Group and Mapletree Investments.
What your Policy Covers
A typical home insurance policy will pay for your possessions and damage to your property in the event of fire, storm, vandalism, or theft. Like when you take insurance out as a renter, it will generally include liability cover for is someone gets hurts whilst at your property and decides to take legal action. Homeowner’s insurance however also covers shelter costs. This means that if you are temporarily made homeless, you won’t have to foot the hotel bills.
Your homeowner’s insurance policy can also protect possessions that are outside of your home including your car. Your auto insurance will often not cover the theft of your vehicle, but your home insurance likely will. Also, your policy will likely cover the loss of items traveling with you; for instance if an airline forces you to put your laptop in the hold luggage and it gets lost.
What’s Typically Not Covered?
Standard insurance policies for homeowners have exclusions that include earth movements such as sinkholes, landslides, and earthquakes. Generally nuclear hazard, war, power failure, faulty zoning, defective maintenance, flooding, bad workmanship, and war are also not included. Tornadoes and windstorms however are generally included, unless you live in a high-risk area.
It can sometimes be difficult to determine if you are covered for water damage. As a rule of thumb, water from above including burst pipes and rainwater are generally included, but water from below that included backed-up sewers and ground flooding generally isn’t. If you live in a region that is prone to earthquakes and floods, you may like to consider taking out supplementary cover.
It is crucial to shop around for the best policy and take time to find an agent or company you can really trust before committing to anything. Ramzy Ayyad would certainly recommend that you shop around after he had a bad experience following a house fire in 2018. He found the process of getting a check for the damages to his home exhausting, having to battle with a rude adjuster. Therefore shop around and read up on the online reviews before committing to anything.
Let’s take a contrasting story to the above, one where Terri Corcoran had a major leak that entered into her laundry room. She has nothing but praise for her adjuster; the damage was assessed promptly and she was issued a check to cover the cost of redoing the entire room. So, don’t just shop for the best policy; make sure you shop for the best agent.
Reducing Premiums with Preventative Actions
Having a smoke alarm is common sense, but it can also lower your home insurance premium. If you install a burglar alarm on your home you could save as much as 20% on your home insurance; a simple deadbolt on the door could reduce your premium by 5%. Your insurance company will price up your premium depending on how much risk they can foresee in your home. If you have a swimming pool in your yard, make sure that you have it gated off. This will stop a child from a neighboring property wandering into your garden and falling in your pool.
The Difference between Replacement Coverage and Market Value
Replacement cost is the amount it would cost to replace or repair your entire home. On the other hand, market value is the amount someone would be willing to pay to buy your home and land in its current and downtrodden state. A policy that is based on market value is generally a cheaper option, but in the event of a serious disaster, you won’t recoup as much money. For people who are not strapped for cash and have emergency funds in place it may be beneficial to take out a more expensive policy with replacement coverage, which will cover more but that will have a higher deductible.
Don’t Wait to File a Claim
When you take out your policy, read it carefully and check the time limits you have to report claims. Abide by these and don’t wait too long; if you wait too long you may not be eligible for a payout. An example of this is with water damage. When it is reported straight away, the cost of repairs will be covered without any problem. However, if water damage is left, mold will grow quickly and there may even be structural damage to attend to; this can result in the insurance policy being void. 14 days is a normal amount of time which is given to the customer to report such problems.
Why It’s Important to Write Everything Down
Let’s take here the example of Coconut Grove, Fla lawyer, Senen Garica. He represents homeowners who have trouble with getting payouts from their insurance companies. He states that many claims are denied as the homeowner has failed to write down and record the details. Everything that is lost must be documented; mitigation should also be documented.
What this means is that not only should you save all appraisals, receipts, and contracts. You should also take down notes of all the phone calls you make and who you spoke to. If you don’t have a safe at home to store these documents in, keep digital copies online on your Google Drive or Dropbox.
Here let’s take the case of a David Cohen who was given his wife’s rings to hold and look after. He put them in his pocket of his jacket and then took the jacket to the cleaners. He was relieved that his insurance covered the loss of the rings, but, it was only to a maximum of 3K. He received without a problem a check for $3000, but as the rings were worth twice that amount, he ended up out of pocket. So, ensure that you check for the limits on jewelry and other expensive items, taking out supplementary coverage where necessary.
Why Good Maintenance is Important
Your insurance company would prefer to pay a little out for your damages as opposed to large sums. And when you prevent damage and use early detection and maintenance, this is possible. Let’s take the example of an Arizona home owner, Deacon Hayes, who paid out for a routine check on his A/C unit.
It was determined from the check that the unit was already partially damaged by a hail storm, the result of this being that his insurance company were willing to pay out for an entire new unit worth $4000. According to this homeowner, one way to be diligent with your home is to keep an eye on your utility bills. If your water bill goes up all of a sudden, and it’s not due to anything you can pinpoint, you may have a leak. When left undetected, this could lead to the major repair of a burst pipe.
Save by Bundling
Bundling on your policies can save you money. But don’t fall into the trap of buying a bunch of policies just to save money. However, as a homeowner who also owns 2 vehicles, it makes common sense to take out auto and home insurance with the same provider as it will save you money. On the other hand, never allow yourself to be talked into taking out policies you don’t need such as life insurance.
When to File Claims
When Richard Clayman’s fence in his back yard was destroyed in a storm, he wasn’t sure whether he would be covered or not. His neighbor also told him that he wouldn’t be covered. But, to his surprise, on phoning his insurance company, he was covered for the damage to his fence. If he hadn’t have phoned on the off-chance, he would never have received the $700 he needed to replace his fence. In another case, a homeowner phoned to report missing shingles from her roof after a storm. To her surprise, not only was she covered for the shingles, but her insurance company actually went on to pay out $25,000 for a new roof.
The moral to the story is therefore quite clear. When in doubt, phone your insurance to check if you are covered; if you don’t, you won’t get a payout. But, avoid filing frivolous claims that are rejected as these can have a very negative impact on your future insurance payments and in extreme circumstances could lead to you be arrested for fraud.