Homeowner/Renter Insurance

Do you own a home? Do you rent a home or apartment or live in church-provided housing? If you answer yes to any of these questions, you may need a homeowner’s or renter’s insurance policy. These policies typically protect against:

• Losses to your home and/or contents, and
• Liability resulting from an accident or injury on your property.

The most common losses covered are those resulting from burglary, fire, windstorm, and vandalism. Most standard policies exclude losses resulting from floods and earthquakes.

When purchasing a policy, you may want to consider the following:

• Buy guaranteed replacement cost coverage. Guaranteed replacement cost coverage can protect you against the decreasing value of furniture, appliances, and other items by paying the cost to replace the lost or damaged items rather than paying the current value of the item. This coverage can be written to also include your house and other structures, allowing you to rebuild if needed.

• Choose the highest deductible you can afford. In the long run, a higher deductible may save you money due to a lower premium. Assuming you do not have a lot of claims, the reduction in your premium may more than offset the increased deductible.

  • - Remember to add the value of your deductible to the amount you save in your emergency fund. That way, you have the money available if needed.
  • - Be aware that deductibles for damage from hurricanes and other occurrences of nature may be a percentage of the replacement value of the home, which can be quite large.
• Review the liability minimums in the policy. The cost of medical care or a lawsuit after an accident can add up quickly. Review the policy limits and increase them if you determine you want more protection. If you are considering umbrella coverage, the liability limits required in the homeowner’s/renter’s insurance must cover a minimum amount of liability in order to work together with an umbrella policy.
• If you are not already required to do so, consider purchasing additional flood or earthquake insurance if you live in an area prone to these hazards.
• Consider adding insurance riders for valuable items. Riders are generally used for jewelry or collectibles that have high individual value. While replacement cost coverage will pay the standard price for replacing an item, it will not cover expensive items at their full value.

It is a good idea to inventory your property by using a video camera and keep credit card bills or receipts. This will make it easier to substantiate a claim.

Automobile Insurance

Certain types of automobile coverage are required in order to operate a vehicle. In addition automobile insurance policies protect against loss and liability due to accidents or damage to your vehicle. Damage to your vehicle is covered with comprehensive and collision insurance.

• Comprehensive insurance covers damage to your vehicle not caused by a collision, such as vandalism, natural disasters, cracked windshield, and theft.
• Collision insurance covers damage when you hit something, such as another vehicle, building, tree, or road hazard like a pothole. The liability provisions of the policy cover damage to others’ property and injury to another person.

When purchasing a policy, you may want to consider the following:

• Choose the highest deductible you can afford. In the long run, a higher deductible may save you money due to a lower premium. Assuming you do not have a lot of claims, the reduction in your premium may more than offset the increased deductible.

  — Remember to add the value of your deductible to the amount you save in your emergency fund. That way you have the money available if needed.

• Review the liability minimums in the policy. The cost of medical care, a lawsuit after an accident, and damage to another’s property can add up quickly. Review the policy limits and increase them if you determine you want more protection. If you are considering umbrella coverage, the liability limits required in the automobile insurance must cover a minimum amount of liability in order to work together with an umbrella policy.
• Consider “no-fault” insurance, where available. Generally, regardless of which party is at fault, you first make a claim with your own insurance company. If state law allows and the other party is at fault, you can then make a claim with the other party’s insurance company if the full claim exceeds the no-fault limits. Talk to your insurance agent to understand if your state allows no-fault insurance and how it works.
• Consider buying uninsured or underinsured motorist coverage. Even though it is a law that all must have insurance, not everyone does. However, even if the at-fault driver has insurance, he or she may only carry the minimum limits required by the state, which may not be sufficient to cover your claim.

Personal Umbrella Liability Insurance

An umbrella policy provides additional liability coverage when a lawsuit that exceeds the liability limits on your auto, home, or renter’s insurance is brought against you.

Let’s look at an example of how an umbrella policy may work:

• You are sued over an incident involving a boat you rented on vacation, or your neighbor dove into your swimming pool and broke his neck. Your homeowner’s liability coverage would pay up to the liability limit on your policy. Your umbrella liability policy would cover the rest (including associated legal fees) up to the dollar amount of the policy.

The insurance company will require your homeowner’s/renter’s and automobile insurance policies to cover a certain level of liability, such as $250,000 or $300,000, in order to work together with the umbrella policy.

Umbrella insurance also provides protection against non-business-related personal injury liabilities such as slander, libel, wrongful eviction, or false arrest.

An umbrella policy is relatively inexpensive for the coverage you are purchasing, typically $150 to $250 for the first $1 million of coverage, then about $100 for each additional $1 million.  Costs may increase with more than one car, driver, and/or home.