Insurance Tips for Homeowners

You've unpacked your things and settled into your new home. But have you thought about how this will affect your insurance needs? Buying a home involves more than just making sure you have homeowners insurance coverage. If you've recently purchased a home, here are some types of insurance that may be impacted by your recent move.

Homeowners insurance

If you have a mortgage, your lender probably required you to obtain some level of homeowners insurance coverage. However, you'll want to make sure that the amount of coverage that you have will adequately protect you for all possible losses. Homeowners policies set coverage limits for specific items (e.g., jewelry), so you may want to look into purchasing a separate endorsement or a floater if you feel that you need to increase your coverage. You also need to know if you have "replacement cost" coverage on your personal property and if you are covered for earthquake damage.

Flood insurance

Homeowners insurance does not provide coverage for flood damage. But those living on a riverbank or near the ocean are not the only ones who warrant flood protection. Even if you live in a low-lying area (e.g., near a creek), you may want to look into purchasing flood insurance. Most companies that sell homeowners insurance also sell flood insurance, so try contacting your own insurance company for more information.

Auto insurance

If you think that there is no connection between buying a home and auto insurance, think again. If you're ever in an auto accident that is the result of your negligence, all of your assets (including your home) could be subject to liability claims if the claims exceed the liability limits of your auto insurance policy. So, you should re-evaluate the existing liability limits on your auto insurance policy to make sure that you have adequate coverage to protect your home. If you feel that you need even more coverage, you may want to look into purchasing a separate umbrella liability policy, which would pay for damages that exceed the coverage limits on your auto and/or homeowners insurance policy.

Disability insurance

Would you be able to make your monthly mortgage payments if you were unable to work due to an accident or illness? A disability insurance policy will pay you a monthly benefit to replace a portion of your income until you are able to work again. Many employers provide disability insurance for their employees. If your employer does not offer disability insurance or if you are self-employed, you can purchase an individual disability policy.

Life insurance

What if you were to die before your mortgage was paid off? Would your family be able to keep up with the remaining mortgage payments? Life insurance can provide your family with the funds to pay off their debts, as well as replace a portion of your income. While many employers offer some level of life insurance coverage to their employees, this amount of coverage may not be enough to provide financial security to your family. So, you may want to consult an insurance professional to help you assess your family's life insurance needs.

Home Insurance and Fourth of July Fireworks

Does your home insurance cover fireworks accidents? With the Fourth of July holiday fast approaching, it’s important to know the answer. What types of accidents are there, will your home insurance company pay for them, and how can you avoid them?

Because each house and family is unique, there is no single or easy answer to these questions. Most home insurance policies provide many different types of protection, and these protections often have different payment limits. Also, there are different types of accidents.

Different accidents, different coverages. If fireworks set fire to leaves in your gutter, a section of your home insurance policy for fire incidents could cover the damage. If fireworks malfunction and injure a friend on your property, a section for medical payments to others might cover it. If fireworks accidentally shoot into your neighbor’s house and break a window, a liability portion might pay for it.

Ask the insurance company. The important thing to remember is that there are many types of home insurance policies, and each type covers different things. To really answer your questions, read and understand your policy, then talk to your home insurance company about your policy and payment limits.

Get an umbrella (policy). If you have lots of assets or need more protection, consider adding an umbrella policy. A personal umbrella liability policy can protect you after you reach the limits of your standard policy. It may also protect you in areas not covered on your other policies.

Practice safety. Even if you understand your home insurance policy and are sure you’re covered, the best way to avoid problems is to focus on safety by using proper pyrotechnic practices. Every year, thousands of people are injured by fireworks, and some are even killed.

Imagine how you would feel if you burned down a neighbor’s house or seriously injured someone while trying to celebrate. Insurance questions would probably be the last thing on your mind. Even if your insurance did cover the accident, the consequences could continue for the rest of your life.

Keep children safe. According to the latest fireworks injury report from the U.S. Consumer Products Safety Commission (CPSC), children make up a large percentage of fireworks injuries each year. Even children under five are injured often, including many burns from sparklers, which can reach temperatures of 1,200 and even 2,000 degrees. The best advice is to avoid private fireworks displays. If you want to see fireworks, go to a professional public display. However, if you insist on lighting fireworks yourself, please follow these fireworks safety tips from the CPSC.