We all watched the devastation of Hurricane Sandy unfold last week. From the terrible flood damage up and down the New Jersey coast, and in New York, to the downed trees and electrical outages in our area, the lives of millions of people will be affected forever. It will take months to years for things to get back to some sense of normalcy for many of these people. For those who lost loved ones, things will never be the same.
Rebuilding homes is a big part of helping to rebuild lives. The damage that many homeowners suffered is beyond what they can afford to repair their properties. The common link they all share is hopefully that they a good homeowner’s insurance policy. For those that lived in water ravaged areas, they should also have had a flood insurance policy. These policies will not replace the personal effects they lost, but they should help put the homes themselves back in place.
This experience should be a bit of a wake-up call for those of us who were not affected. Do you understand the major provisions of your homeowner’s policy? Do you know what your deductible is? Does your policy cover provide for full replacement cost or actual cash value? Replacement cost will provide you with better coverage if you experience a claim, but it does come at a price.
If you are renting a home or apartment do you have insurance? Do you understand the provisions of your coverage? This coverage is more around the contents of your rental, but can be just and important as a regular homeowner’s policy.
The take-away from this is that you owe it to yourself and your family to get in touch with your insurance agent to review the following things:
- Is the base coverage on your policy sufficient to rebuild your home in a catastrophe?
- What is your deductible?
- Does your policy provide for a specific percentage of the base coverage for your contents?
- Do you have coverage for any valuables that would not be covered by your base policy such as jewelry, collectibles or artwork?
- Given the type of home you live in, or your location, are there any other specific coverages you should consider purchasing to ensure you are protected?
Taking the time to audit your coverage will provide you with peace of mind that you have taken the necessary steps to protect your family. Once you understand the ideal coverage for your home, you may actually save some money by doing some comparison shopping. If you are going to go through this type of exercise, I highly suggest you review your auto insurance at the same time. I did this last year and ultimately made a change that resulted in an increase in my coverage at a significant savings.
Good luck with your planning!
Good luck with your planning!
The views expressed are not necessarily those of Cambridge and should not be construed as an offer to buy or sell any security.
Jim Heisler, CFP®, CDFA™, CASL™ Family Wealth Services, LLC 8725 Frankford Avenue Philadelphia, PA 19136 email@example.com 215-332-4968