Here’s the best way to score a table at a busy restaurant. Walk up to a table of nice people and say, “Let’s talk about insurance!” Within seconds, the table is yours.
Nobody enjoys the topic, but I think we all recognize the need for homeowners insurance.
I was reminded why again last week.
I received a message that good friends of ours who lived around the corner from our house had their home burn down. They’d recently relocated to Colorado.
Those forest fire pictures you’ve been seeing in the news? Those are the flames that destroyed nearly everything our friends owned.
We don’t like to talk about insurance, but events like this are a good reminder that we should revisit the policy periodically to make sure we know what protection we own.
5 Important Homeowners Insurance Provisions
1) Replacement value coverage– Most homeowners policies are replacement value coverage, but it’s worth checking. If yours isn’t, you’ll receive the fair market value of each item you claim. That five year old computer? Probably not worth the $1,000 you spent on it anymore….
2) Valuables itemized and insured separately? Although policies will replace your belongings, high value jewelry, artwork and personal items should have a separate endorsement. Insurance industry friends tell me to check with your agent or company because competing insurers have different levels of personal endorsements.
3) Renters? Roommates? Here’s a sticky point. If you’re living in a home but don’t own it, you’ll need renters insurance for your personal items. Many people rent because they have a tight budget, but this is one important area to spend the money (and hopefully never have to use it).
4) Deductible. Remember that recommendation some crazy website made about funding a cash reserve emergency account? Partly, that’s so you can self-insure and tell the insurance company to take a hike! As your deductible grows, the amount you have to pay for insurance declines. That’s the good news. The bad news? You’ll owe a larger amount when you have a claim, so don’t raise your deductible until you’ve funded your emergency fund.
5) Inflation protection. Because thinking about your homeowners insurance is feared worse than a trip to the dentist, inflation protection increases the value of your coverage over time. This way, even if you forget, you’ll have protection that keeps up with rising costs.
While I can’t say that you’ll be the hit of the neighborhood by having a great homeowner’s policy, you will be able to relax a little after disaster strikes. I’m glad my friend’s family is okay. You can always replace a house.
Let’s keep the discussion going in the comments. Now that we’ve covered some important homeowners insurance provisions, how do you score a good deal buying it?
Photos: Fire Fighter: Roby Ferrari; Forest Fire: National Guard
So sorry to hear about your friend, Joe! That’s awful! We have homeowner’s insurance, but hopefully we don’t have to use it this week. Our 15-year-old neighbor has been shooting off fireworks despite the weather that’s been well in the triple digits for 10 days, and the area-wide ban on them this year. He’s a honey badger. He and his parents always shoot off thousands of dollars worth every 4th of July, so every 4th, we go elsewhere in case our house should burn down. 🙁
I think getting away is better than staying through that. Apparently bans don’t apply to him!
I hop your friend was insured! Insurance can only replace things though. I went through a pre-evacuation for fire about 20 years ago. I realized real fast that you want to protect lives and the irreplaceable things like photos and memorabilia. You cannot take everything, but you try.
We also face earthquakes in Los Angeles which is a constant threat.
I can’t imagine how you and Len (and I’m sure other bloggers) do it with earthquakes. I’ve only been through three and it’s unbelievable. There’s nowhere to run when the very ground is shaking.
Significant earthquakes occur maybe once in your lifetime. The others usually do not even cause damage. They do startle you though. In other parts of the country there are hurricanes, tornadoes and snow storms every year.
I can’t imagine losing everything. I hope your friends will be able to recover.
Insurance is something I have always made sure we have. Right now we are renting so we have content coverage, liability coverage, coverage for an alternate location should something happen here, coverage if the place burns down and it is deemed our fault and extra coverage for my jewellery.
That’s awful to hear about your friend…sorry man.
I think the best way to score good insurance rates is simply by shopping around. I ultimately think it’s best to find a broker, but if you’re going to go to a company that can only sell one product/company then make sure to call at least 3-4 places.
If you’re in the military or have a family member that is in the military then I don’t think you can beat USAA’s rates. We have all of our insurance through them and nobody has been able to come close to what they offer us.
I’m so sorry about your friend. I hope the life-rebuilding process is going well. And thank god they themselves are all right.
I agree with Jason about USAA. Their rates for insurance are unbeatable. I’m not a owner, but a strong proponent of renter’s insurance. The coverage for not just theft or disaster, but also personal liability, is so important.
You’re right. I startd reading the post and almost clicked away. Ugh. Insurance. As exciting and fun as a dirt sandwich. But it is important and my wife and I shoudl look at our policy and make sure that it’s okay. It IS important to get it nailed down just right so that we’re taken care of in an accident.
The fires in Colorado are horrible. You definitely need to make sure you understand your insurance policies or you can be in a world of hurt when you actually need to make a claim and find out something isn’t covered.
Home insurance has definitely been very important. I shudder to think about what would have happened had we faced our challenges without insurance. It would have turned two of the most stressful events that have occurred since owning that house into total crises. That said, everyone seems to look out for their own interests, so you have to make sure that your rights are protected.
I’m glad you mentioned renters insurance. Most renters skip it, but it’s cheap and a must have. Especially since the more people you cram into a building, the more likely one of your neighbors are likely to set your apartment ablaze.
I came here after a long time and you bored me with insurance, now the internet is all yours, I am leaving.
We don’t have renter’s insurance but our valuables are in bank locker. I can replace the things we accumulated in our rented apartment. So this insurance is not justified.
Wow, that sucks for your friends, but thanks for letting me know how to get a good table. 😉
Very well said. I really believe that Homeowners insurance is very important so that you and your family are insured. In case of any emergency it is better to have a homeowners insurance.
It is good to be prepare rather than waiting for the unwanted things to be occur. Home insurance is very important for the safety of our homes. life is full of unwanted things and any thing could be happen. It is better to have home insurance and provide a cover for the home. Home insurance will help you in repairing the damage parts and replacing the lost valuable things.
Home is a big investment and to take care of it , is our responsibility. Home insurance is, that is why very important. We can compensate losses due to any mishappening within our home.
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I’ve never owned a home, but I can vouch for the importance of both homeowners insurance and renter’s insurance. Last year a fire consumed an apartment complex in my town and most of the 150+ residents lost everything with no hope of recovery because they did not take the time to get renter’s insurance.