Homeowner's Insurance: When NOT to File a Claim
In some cases, filing a claim against your homeowner's insurance is just not worth it. In addition to getting socked with higher premiums, you could find it harder to get coverage later.
The big question is, when should make an insurance claim, and when is best not to?
Unfortunately, there is no cut and dry simple answer to that question, as individual circumstances vary. Things such as; how long have you had your home insured without a claim? How many claims have you had? What (specifically) were the claims for?
Different answers to those questions present a different answer as to whether you are better off filing a claim, or handling the situation yourself and NOT filing the claim.
Insurers increasingly are using a huge industry database, called the Comprehensive Loss Underwriting Exchange, or CLUE, to drop or deny coverage based on a home's history of claims or damage reports. Insurance companies are terrified of rising losses from water and mold damage. So a single report of water-related problems may be enough for insurers to shun your home.
So far, insurers' increased use of the CLUE database has not caused any serious problems those looking to sell.
Think twice about those water-related claims. This is especially true if you plan to sell within a few years. You might be better off paying to repair the problem yourself rather having your home be branded as high risk.
There are more tips for when to file and when not to online, so our advice is, do your homework.
Renter's Insurance: Why You Need It
So you're renting a house or condominium, and think the owner of the property has insurance, why would you need any?
The homeowner's property insurance policy that covers the physical dwelling you live in does not cover your possessions inside of the building.� A renter's insurance policy (also known as a tenant's policy) provides protection for your personal property, such as furniture or electronic equipment, in case of perils like fire, theft or wind damage from a hurricane.
Renter's insurance provides liability protection.� Unintentional bodily injury or property damage that you cause to others could be as financially damaging to you as a fire in your apartment.� Liability protection against accidental occurrences (such as a visitor slipping on your wet kitchen floor and breaking an arm) comes standard with renter's insurance policies.� Some renter's insurance policies will even include legal defense costs, should you need legal representation to defend you due to a liability claim.
Renter's insurance will also cover medical payments, including medical expenses for non-residents.
Compared to what you could stand to lose in the event of a serious loss, renter's insurance is cheap.� Check online, or check your Yellow Pages.� Most insurance companies offer renter's insurance, and you'd be playing Russian Roulette with your finances by NOT having it.
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Remodeling Your Insurance After Remodeling Your Home
The benefits of renovating your home make the expense an intelligent investment, but protecting that investment is paramount. That’s why you should consider remodeling your homeowners insurance as well.
Renovations often result in homeowners insurance coverage shortfalls in two areas: dwelling protection—which involves structural improvements to your home—and personal property protection. Built-in enhancements such as new windows, doors, custom cabinets, granite countertops, bars, islands, and flooring need to be brought to the attention of your insurance agent. You also should discuss any major personal property purchases, including appliances, furnishings, and decorator curtains and blinds.
When insuring personal property—especially appliances and electronics—check to see that your policy covers replacement value of your property, rather than the actual cash value. The actual cash value consists of the replacement cost of an item less the amount it may have depreciated. Appliances and electronics depreciate quickly. The amount your homeowners insurance will pay for a depreciated item usually is not enough to replace it with a new one. Unless you enjoy cruising the thrift stores, you should opt for replacement value. That way you can shop at Circuit City instead of the Salvation Army.
Keeping your homeowners insurance agent in the loop is a good practice in general, but a major remodel should prompt an immediate conversation. If something happens tomorrow, you want to make sure your homeowner’s insurance will replace what you have today—not what you had yesterday.
Term Life Insurance for New Homeowners
Buying term life insurance for your family is a great gift that you can offer them by allowing them to continue to live in your beautiful new home, even if you should happen to pass away unexpectedly before the mortgage is paid off.
Buying a home can be an extremely tedious, stressful and lengthy process. Your emotions will run the full spectrum from fear and anxiety to total elation, and you will probably find yourself wondering if was the right decision, or if you really can afford it.
When it comes to buying term life insurance for new homeowners, the most important consideration is whether or not your life insurance payout will be enough to pay off your mortgage as well as to support your family until they can support themselves. Even if your spouse decides to take on the monthly mortgage payments for tax purposes, will the insurance benefit offered to him or her be enough to sustain them completely for the rest of the time on the home loan?
3 Key Term Life Insurance Tips:
1) All term life insurance policies are developed to be the most cost effective but you should still shop around to make sure you are getting the best deal out there.
2) Shop around and obtain as many term life insurance quotes as you can to ensure that you are getting the best price and the best coverage to protect your family in the event of your death. You may find the exact same coverage in several different carriers, but may be cheaper in some states and much more expensive in others.
3) Make sure you are getting the right kind of term life insurance. Because there are three different forms and each is a little different and offers a different level of benefits at different monthly rates.
It's difficult to think about the potential of a tragedy, but thinking about term life insurance is an unfortunate but necessary part of every family's financial planning plan.
Eliminating PMI
You have to insure your home. But do you really have to insure that mortgage too? It's called private mortgage insurance, and according to money expert Stacy Johnson, for many people, it's expensive and unnecessary. Watch the short video (1:24) and tell us what you think.
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