These past couple of weeks have been tough for our community, especially those impacted by the Marshall fires. Rick Baker, one of our trusted insurance partners, was kind enough to put together a checklist of items that you should consider during a home purchase or remodel. While it may seem daunting to talk with an insurance agent, it is always a good idea - you never know what your property might qualify for, or how much peace of mind a good policy can provide for you.
INSURANCE CHECKLIST PREPARED FOR
WK Real Estate
HOME COVERAGE QUESTIONS TO THINK ABOUT
DWELLING GUARANTEE OR EXTENSION - This coverage extends your home insurance policy to cover anywhere from 10% to 100% of the cost to rebuild your home. What percent would you feel comfortable with? 10%, 25%, 50%, or 100% coverage?
BUILDING CODE COVERAGE - This coverage adds to your homeowners insurance to help cover the additional cost of repairing your home "up to code" if it is damaged by a "covered peril," such as fire, lightning, hail, and more. Once again, you can choose a range from 10%+ of your dwelling to apply for coverage. HOW Much do you currently have? DO you need more? Are you in a Mountain or foothill home? If so, this may impact your decision, too!
DEBRIS REMOVAL - In the event of a disaster/peril, there may be debris that needs to be removed. This coverage will pay for some or all of that cleanup. Typically, the policy will cover an amount up to 25% of the amount paid for the direct physical loss, plus 25% of the amount of your deductible. However, you can often get more coverage if you're willing to pay a higher premium. DO you need more coverage?
LOSS OF USE - This coverage, also called "Additional Living Expenses" (ALE), can help pay the additional costs that can accumulate if you are displaced from your home and need temporary housing. ALE coverage can cover things such as hotels, apartments, moving costs, extra grocery/restaurant bills, transportation fees, and more. This coverage typically ranges from 20%-30% of your home's insured value. How much do you need for 1 or 2 years of expenses, or a % of your dwelling coverage?
ARE THE DWELLING COVERAGE LIMITS ADEQUATE TO REBUILD? Who determined the building replacement cost of the home? Was a builder consulted? Was it premium cost or coverage quality that was considered? DO you have to rebuild with the insurance company? Is there depreciation on your settlement if you elect not to rebuild? Did the mortgage company find your insurance for you to fit in their calculations to close? Who is ultimately responsible at the end of the day?
CAN YOU REBUILD A SMALLER HOME IF YOUR COVERAGE LIMITS ARE NOT ENOUGH FOR CURRENT DWELLING REPLACEMENT? This is a question that should be asked early in the settlement discussion. It may significantly impact your rebuild decision(s) moving forward.
DO YOU NEED TO SUBMIT AN INVENTORY OF YOUR PERSONAL PROPERTY FOR THE COMPANY TO SETTLE THE CLAIM? If so, what documentation is needed? Can you elect to settle for a lower amount of personal property coverage and bypass this requirement?
We understand that these are tough questions. It's never easy to consider "worst-case scenarios." However, going through this process of insurance coverage questioning will give you a solid idea of how to move forward with your homeowners policy, any additional coverage you require, and some of the more intricate details about your policy.
After reading through these items and ideas, feel free to Call Rick's agency directly if you have further questions. He is always happy to help.