October 2005:
Home is Where
the Insurance Is

Home. It contains your precious possessions and memories. It’s the place you go to unwind, have fun, play with your children, and cook special meals for special someones… Home is indeed where the heart is. And like your heart, it needs protection. Whether you rent or own, the right insurance products make sure that your home, at least financially, is safeguarded against major catastrophes.

A minimum of homeowner’s insurance is required. Basic coverage insures your personal property and personal liability, and protects your lender against non-payment of the mortgage balance. You may need more though. Consider adding:Building code upgrades – If you own an older home, go for a policy that includes building code upgrades. If you have to rebuild, most policies will just cover what it costs to put things back exactly the way they are now.
  • Earthquake insurance – Earthquake damage is rarely covered in a typical policy. Though pricey, if you live in an area that trembles, it may be worthwhile to pay extra for it.

  • Flood insurance – Most policies do not cover losses due to flooding. If your city or town is prone to flooding, flood insurance is a must-have. Too expensive? The Federal Emergency Management Agency (FEMA) offers flood insurance at reasonable rates.
Renter’s insurance is not required, but if you own more than a bicycle and a computer, it’s a very smart investment. Premiums are usually inexpensive and discounts are often available if you have dead bolt locks, security systems, smoke detectors and fire extinguishers in your rental property. Buy the policy with your automobile insurance and you could be eligible for a dual-policy discount.

The type and cost of the plan you purchase is based on individual needs. Consider:

  • Personal property coverage – It protects your personal property against such hazards as fire, smoke or lightning, burglary or vandalism, explosion or electrical surge damage, windstorm or hail, and falling objects.
  • Liability coverage – It offers financial protection against lawsuits for accidental bodily injury or damage to property while in your home.

  • Replacement cost coverage – It reimburses you for the full cost of repair to replace your property at today's cost.
It can be tempting to skimp on insurance – after all, you may never need it. Yet recent tragic events prove that disasters do happen. The anguish of rebuilding a home can be minimized with the right insurance. Review your coverage today. You’ll be glad you did.