January Newsletter 2024

1. Establish a contact at a reputable company that is qualified and authorized to advise you on properly insuring your home. The advice you’ll get from an agent that only represents one insurance company will be different from the advice you’ll get from a public agent that represents the home owner.
2. Figure out the cost to replace your contents and adjust your policy limits accordingly. Some items such as jewelry, art items and collectibles may be better insured if they’re specifically listed in your policy contract. This is known in the industry as “scheduling.” Scheduled personal property items are listed with separate coverage limits in a document that becomes part of the policy contract.
3. Make sure you have enough contents coverage. A replacement cost endorsement that increases your dwelling limits may not also increase your contents limits.
4. Your Additional Living Expense (ALE) limits should cover rent, etc. for at least two years after a total loss. Many companies require you to use your ALE coverage within 12 or 24 months after a loss, even if you haven’t exhausted the limits. This can be a problem because it always takes longer to rebuild than you anticipate, especially in a disaster area. If your insurer only offers 12 months of ALE, consider switching to a competitor. You may not have to pay a lot more for better ALE coverage. If your insurer offers a fixed dollar amount with no time limitation, divide that amount by 24 months to compare the coverage.
5. To be extra safe, check the dwelling limit (“Coverage A”) that appears in your policy against what you know about your home and construction costs in your area. If they don’t match, ask your agent or insurer to explain why they don’t. Contact reputable homebuilders in your area to determine the current range of per square foot construction prices for your type and size home. Apply that range to your home; add at least 15-20% to account for future price increases and post-disaster price spikes and compare it with the dwelling limits your insurance company has set. Discuss and resolve any discrepancies with your insurance.

‍