1. Know about exclusions to coverage. For example, most insurance policies do not cover flood or earthquake damage as a standard item. Other items typically excluded from coverage are back up water and sewage or drains, vandalism and glass breakage, and theft to a dwelling under construction including materials and supplies. These types of coverage must be bought separately.
2. Know about dollar limitations on claims.
Even if you are covered for a risk, there may be a limit on how much the insurer will pay. Without further endorsements (a written form attached to an insurance policy that alters the policy’s coverage, terms, or conditions) policy coverage for personal property is typically 50% of the total amount that the home is insured for. In addition, there are specific limits that apply to specific types of personal property items. For example, many policies limit the amount paid for stolen jewelry unless items are appraised and insured separately. Then, you may need to buy endorsements to protect items worth more than $1,000.
3. Know the replacement cost.
If your home is destroyed you’ll receive money to replace it only to the maximum of your coverage, so be sure your insurance is sufficient. All homeowner’s policies contain a replacement cost provision that requires the insured to purchase an amount equal to 80% of the replacement cost of the dwelling replacement. Keep in mind that replacement cost applies only to the buildings and generally, not the personal property covered under the policy.
4. Know the actual cash value.
If you chose not to replace your home when it’s destroyed, you’ll receive replacement cost, less depreciation. This is called actual cash value. With regards to personal property, you will have to show evidence of actual purchase of the replacement item in order to receive payment of the replacement cost as final settlement of a claim. Moreover, the insurance company will not be anxious to pay out the full dollar amount of the replacement cost without assurance that you will actually replace the property. This is particularly true because the value of most property significantly depreciates over time and there may be a large dollar gap between the actual cash value and the replacement cost.
5. Know the liability.
Generally your homeowner’s insurance covers you for accidents that happen to other people on your property, including medical care, court costs, and awards by the court. However, there is usually an upper limit to the amount of coverage provided. Be sure that it’s sufficient if you have significant assets.
Keep in mind that the basic homeowner’s policies usually contain various limitations and exclusions in coverage. Therefore if you are an owner of valuable personal property, you often will need broader and more comprehensive coverage than is provided by the basic homeowner’s policy. This broader and more comprehensive coverage may be obtained through appropriate personal property insurance.
Keep up to date with timely financial tips and subscribe to the free newsletter. Visit http://www.yourinfo.blogspot.com Will Barnes is a financial and personal growth consultant based in Illinois.
Filed under Home Insurance by on Mar 30th, 2010. Comment. 
Progressive Auto Insurance question.?
So here’s the deal, I live in Michigan, I had PLPD insurance from progressive, I’ve had them since 2.5 years ago when I got my license up until last Wednesday when the insurance expired and my parents can no longer afford me on their plan (I’m 18 and have 13 pts on my license which got suspended last month) But in January, some kid slid through a stop sign and hit me, the car is technically totaled since the KBB value is less than the cost of repairs. I filed a police report and everything and faxed it to Progressive and now they’re saying that they can’t get me the $500 that they owe me cuz the kid didn’t have insurance at the time of the accident. Here’s the catch, the cop took down his insurance info and didn’t even write him a ticket for running the stop sign. Progressive is saying that the only thing I can do is take the kid to small claims court and sue him for the $500. I feel like Progressive is just jerking me around, anyone have any insight on this?
Did you still have your card after your insurance expired? So did the kid that hit you. Obviously Progressive tried to get that $500 (and what they paid out) back from the other insurance company, but the kid was not covered when he hit you.
You are owed your losses by the person who hit you. So take him to small claims for the $500 if you want it back, as they told you that is your only option.
Do it quickly because I imagine Progressive is also suing him for what they paid out.
Filed under auto insurance price quote by on Mar 29th, 2010. Comment.
Can I insure my wife’s leased vehicle if I am not on the Lease agreement?
Got my wife into a vehicle lease recently to replace our 10yr old car. Didn’t want to put my name on the lease as we are planning a renovation on the house later this year and did not want the lease to affect my Debt Service Ratio. However, my wife had an accident this summer, and has no discount on her car insurance. When we went to insure the leased vehicle, they wouldn’t insure it under my name even though we have the same address and are married. I get a 25% discount, so the cost difference is significant.
Do I have any options here? Haven’t tried calling the insurance company directly yet. I am in Manitoba, Canada.
She has to be on the insurance to legally drive the car. If you just insure it and she drives it, she won’t be covered. Most insurance companies require that both people be insured if they are in the same household. Just make sure you are the primary driver on the policy because the primary driver has the most weight. I’m not sure about Canada, but in the US it’s 3 years after an accident when insurance rates get better. Until then you may just have to eat the cost, especially since the vehicle is leased and full coverage is required. Good luck!
Filed under Home Insurance by on Mar 25th, 2010. Comment.