I've got it covered

Today's Assignment

Review your homeowners insurance policy to ensure you are adequately covered in case of disaster.

Even with adequate time to prepare for a disaster, you still may suffer significant, unavoidable damage to your property. That's when insurance for renters or homeowners can be a big help. Yet, many people affected by recent disasters have been underinsured, or worse, not insured at all. Homeowners insurance doesn't cover floods and some other major disasters. Make sure you buy the insurance you need to protect against the perils you face.

If you own a home...

Buy, at a minimum, full replacement or replacement cost coverage. This means the structure can be replaced up to the limits specified in the policy.

Investigate buying a guaranteed replacement cost policy. When and where available, these policies can pay to rebuild your house, including improvements, at today's prices, regardless of the limits of the policy.

Have your home periodically reappraised to be sure the policy reflects the real replacement cost.
Update the policy to include any home improvements, such as basement refinishing. Annual automatic increases may not be enough to cover these.

Buy a policy that covers the replacement cost of your possessions. Standard coverage only pays for the actual cash value (replacement cost discounted for age or use).

Be very clear about what the policy will and will not cover, and how the deductibles work (the part you pay before the policy pays).

Check state-operated or federally operated insurance pools if you find it difficult to obtain private coverage because of a recent disaster. Premiums often run higher than market rates, but this is better than no coverage.

Use your home inventory list to check that your policy's coverage matches the value of your possessions.