Posted on 01/10/2013, by Jeremy Edsall
Homeowners Insurance Should Be Reviewed Annually
Whether you rent or own, keeping your home and its contents safe is a priority. This includes having the right amount of insurance coverage.
The State Corporation Commission's (SCC) Bureau of Insurance encourages Virginia homeowners and renters to review their insurance policies annually to make sure they have the coverage they need. A homeowner's insurance policy covers the structure and contents of your home and legal obligations if someone is injured on your premises. A renter's policy does not insure the structure, but otherwise provides similar coverage.
"Virginians want the peace of mind that comes from knowing they have the insurance coverage they need, when they need it," said SCC Insurance Commissioner Jacqueline K. Cunningham. "Lack of understanding about your insurance coverage can be costly." She encourages Virginians to schedule a yearly checkup with their insurance company or agents to learn more about what to expect from insurance policies and providers.
The Bureau offers the following tips when reviewing your homeowner's or renter's coverage or shopping for a policy:
■ Determine the right amount of coverage for your needs. This includes making a room-by-room inventory of all your personal property.
■ Know the difference between actual cash value and replacement cost. Actual cash value is the amount it would take to repair damage to a home or to replace its contents after allowing for depreciation. Replacement cost is the amount it would take to rebuild or replace a home and its contents with similar quality materials or goods, without deducting for depreciation.
■ Weigh the cost benefit of opting for higher deductibles. Deductibles are the out-of-pocket costs you agree to pay to repair damage to your home or its contents before you are entitled to collect from your insurance company on each property damage claim you make.
■ Ask about discounts such as multi-policy discounts or discounts for alarm systems.
■ Review your policy's liability and medical payment limits. Liability insurance protects you from legal obligations if someone is hurt while visiting your home. Homeowner's and renter's polices also typically include limited medical expense payments for injuries to visitors on your premises.
■ Consider any special items in your home like art, jewelry, memorabilia or collections (such as stamps or coins) that may require special coverage.
■ If you operate a small business out of your home, you may need additional coverage.
■ Determine what types of losses (such as flood) may not be covered by your standard homeowner's or renter's policy and ask about available options.
■ Consider whether an umbrella policy would suit your needs. Such a policy provides excess liability limits and possibly other additional coverage above a homeowner's or renter's policy.
■ Select insurance agents and carriers with care. Deal only with insurance agents and companies that are licensed by the Bureau of Insurance to sell insurance in Virginia.
■ Shop around. Not every company charges the same rate.
■ Remember: an insurance policy is a legal document. Read it carefully. Also read all notices and information sent from the insurance company.
Source: Virginia State Corporation Commission Bureau of Insurance