Despite what you may have heard about endorsements or riders regarding jewelry, your jewelry is partially covered by your base homeowner’s policy. If you lose, damage, or otherwise destroy your jewelry, you can still make a claim with you homeowners insurance provider. Usually the upper limit is capped at your coverage limit of either $1,000 or $2,000 depending on your policy minus your deductible. So if your limit is $1,000 and your deductible is $1,000… unfortunately you’re “covered” but you will get nothing back. If you’re limit is $1,000 and your deductible is $500, you’ll be able to recover $500 - which may or may not be worth the effort (you may have to prove its value as well as file a police report so that an official record exists).
This is true for anything high dollar that could go missing or damaged, such as paintings, scultures, fine china, silverware, etc.
In my post about Adjusting Insurance Based on Home Price, I was called out by an anonymous commenter, who said I shouldn’t talk about things I didn’t know (which is probably good advice, but I’ve never called myself an expert), because I said you should reduce your insurance coverage because your home may be worth less. He or she was right, that was bad advice, I was merely reflecting my own situation in that my home value was higher than my replacement value and thus I was no longer obligated, by my lender, to insure at the higher value. That was the impetus for the original post and it made sense for me, but may not be for you.
Lately, life has been tough on homeowners as they watch their home values slip, fall, or tank and as a homeowner myself, I can say first hand that it’s a little disconcerting. Well, there is one home insurance related positive note that you can take advantage of and that’s the fact that you can reduce how much homeowners insurance you’re paying for since the value of your home has fallen. If your home was worth $500,000 a year ago, you were insuring it for approximately that much or a little less (depending on the rules of your insurance company and your lender). If your home is now worth slightly less than that, say $450,000 now, you can talk to your insurance agent and get your insurance reduced because your home is no longer worth $500,000 - the original amount. While it hurts to have to admit the loss in value, at least you can save a few dollars in your pocket.
If you are insuring your home based on replacement value, this little math won’t help you as much but every little bit helps!
Did you know that if your house is flooded and your car, sitting happily in the garage, is damaged by the water, then you should be covered by your car’s comprehensive auto insurance policy? It doesn’t matter that the car was garaged in the house, if it is damaged then it usually will be covered by your automobile insurance policy. While the prospect of recovering your car, given damage to your home, isn’t going to bring much of a smile to your face, it’s certainly better than nothing!
So, if you’re dealing with flood damage and your car was a victim, remember to contact your car insurance to file a claim.
I unearthed this gem of an article back in 1991 in the New York Times regarding heavy flooding in the New England area, stretching from New Jersey to Maine. The article goes on to discuss how even though you may not have separate flood insurance coverage with your regular homeowner’s insurance you may be covered by the Federal National Flood Insurance Program. If you are in a flood prone area, your lender may have forced you to enroll at the time of purchase to protect them. So, if you’re dealing with the aftermath of a flood and realized that you don’t have flood insurance, you might luck out and have it through the NFIP.
Did you know that if your car is broken into and contents are stolen, practically every item not attached to the vehicle is covered by your homeowners insurance and not your car insurance? For example, if you have a bunch of CDs sitting in your glove compartment and a thief gets to them, you have to file a claim with your homeowners insurance and not your auto insurance for those CDs! You would still have to file a claim with your auto insurance, in case there was damage to your car or just as a matter of protocol, and file a police report so that there is a public record of the theft; however the actual claim for contents would need to be filed with your homeowners insurance!
The reason for this is because homeowners insurance covers your property whereas automobile insurance doesn’t. Comprehensive coverage only covers damage to your car, you will have to turn to homeowners and rental insurance to recover losses related to property.
According to the Insurance Information Institute, or III, “the average cost of insuring noncoastal residences in 2008 is expected to be up just 2% to 4% in many areas and flat or even falling in others.” The reason is because the property and casualty insurance industry is experiencing the down-trend of their market cycle and and increase competition. Competition is heating up in every insurance area, including car, business, and homeowners, except for those in hurricane-exposed areas. The losses in those areas in 2006 and 2007 were a fraction of the $62B lost in 2005 (mostly because of Hurricane Katrina).
So, shop around and you might be able to find a better deal.
Source: TheStreet.com
There’s a great article in WSJ Online that discusses some new security systems that allow you to monitor from afar on the internet. This is something a lot of home brew security systems have offered, online access, but this is the first I’ve heard of a professional system offering that level of service.
The second part of the article discusses localized systems that monitor parts of the house, such as the gun box or the liquor cabinet. A sensor is a sensor is a sensor, whether it’s an open door or an open cabinet, sensors can monitor either.
Tomorrow is Valentine’s Day and chances are you will be giving (or receiving) a piece of jewelry on the wonderous day that is February 14th. If you do, consider getting a jewelry rider to cover you in the event that piece is loss. In fact, and this is something to remember for next year, get that piece of jewelry insured before you gift it to your loved one. There is no reason you need to wait until after you give it away before you get a rider, plenty of things can happen between now and then.
So, on this Valentine’s Day, remember insurance and maybe it’ll save you from some heartache in the future. (If he or she breaks up with you, unfortunately insurance won’t cover that!)
Buying a home can be very stressful, so it’s not surprising that some people would confuse mortgage insurance with homeowners insurance. The two are very different.
Mortgage insurance is usually purchased by the borrower, on behalf of the lender, to protect the lender against the borrower defaulting on a mortgage. It is also known as private mortgage insurance, or PMI, and is generally required if the borrower puts down less than 20% on their down payment. The borrower can get a second mortgage and avoid PMI but if he or she gets a loan for 80%+ then a lender will require it. PMI recently was made tax deductible.
Homeowners insurance, which is what this site is about, covers the borrower in the event of damage or loss in their home. If your house burns down, homeowners insurance protects you. If someone breaks into your house and steals something, homeowners insurance protects you.
Hpefully the difference is clearer now.