Our New Home (Insurance Policy)

 

My husband and I recently purchased our first home!  It’s an adorable little home (see above!) in the comfort of a suburb of Chicago and we were beyond excited to move in!  But as any homeowner knows, there are a million things to do before you move in to that new home.  Obviously, being a good “insurance nerd”, after the loan was approved and all the paperwork was transferred, my first reaction was, “We need good insurance.”  But what does that mean?  Ask 100 people to define “good insurance” and you will get almost 100 different answers.

Here are some of the things I considered when choosing insurance:

·         Agent/Broker: This is probably the most important decision when it comes to insurance.  This person is representing you to the insurance company.  If you have a less than great agent or broker, the insurance company may question things more often, may receive claims that likely should not have been turned in because they are under your deductible, and not to mention you may not get the service you expect or deserve year after year.  Don’t discount how important this decision is.

·         Replacement Cost:  Replacement cost IS different than market value.  This is one of the hardest things for individuals I speak with to comprehend.  Sometimes replacement cost is more and sometimes it is less than market value.  I have seen both situations, but more often than not, it is more.  Make sure your agent or broker is utilizing some sort of tool to help them put together this number.  Some insurance companies will come out to your home to do an appraisal, which will confirm that the number you are placing on the policy is the most accurate. 

·         Insurance Contract: Make sure your insurance contract is the broadest you have.  Some companies offer earthquake, flood, back up of sump and sewer, etc. all right on the homeowners policy.  Consider the risks you have in your area and look to protect those.  And, if you’re new to the area, why not ask your broker or agent what they see and what their clients are concerned about?  Also, make sure you have at least replacement cost coverage!  (See my post “Valuation Battle: ACV vs. RC vs. ERC” from 12/30/13 for more details.)

·         Pricing: Price is always a consideration when choosing coverage.  While looking for coverage, remember that every insurance company has a different target market.  Some companies want homes over $1M in replacement cost, some companies are looking for clients with no claims, some companies only want homes with alarms that are monitored.  Brokers typically have access to more than one company and can help you make a decision about which carriers are best, so this is likely an easy way to explore the market.

·         Company: There is something to be said about branding and customer experience of insurance companies.  You want to be sure that if there is a claim, your insurance company is going to work with you to get your claim resolved, not against you.

·         Ownership of the Home: Did you title your home in a trust or an LLC?  It’s EXTREMELY important to make sure that your company adds this entity as an additional insured.  This provides liability coverage for this entity should it be sued in the event of a liability claim.  Not all companies can do this, so make sure to check while going through the placement process.

There are so many other things to consider, but these are what I found to be most important.   Happy home hunting!

A Diamond is a Girl's Best Friend

 

There aren’t many people I know who don’t like getting something new and shiny – especially if it’s a beautiful tennis bracelet or a great pair of diamond earrings.  As the saying goes, “A diamond is a girl’s best friend.”

Over the past three weeks I have run into multiple individuals who are concerned about their jewelry collections and potential losses associated with these items.  What are some of the (warranted) concerns I am seeing?

-          Chipped or missing stones

-          Mysterious disappearance of an item

-          One lost item of a pair or set

-          Theft

So – what is the best way to avoid or deal with these losses before they happen?

-          Have your items regularly checked by a jeweler (One recent client caught a horrible loss because the jeweler checked this item every six months.  If they had not done this, it would have likely been years before they were able to recover the damages.)

-          Get an in home safe that is bolted down (I can’t tell you how many horror stories I have heard where the individual has a safe but it’s not bolted.  The thief takes the entire safe and the whole collection is gone.)

-          Make sure your insurance policy includes pair and set coverage (This is especially important for earrings.  If one earring is lost or stolen, you want to be sure you can replace both of them so they match exactly.  This endorsement allows you to do that.)

-          Bring only enough jewelry for you to wear if you’re traveling (There are some cases where you may need special items, but at the risk of having them stolen or left behind, it’s always better to only bring what you will wear to and from the airport.  There are numerous real life examples of individuals having their bags checked by security and items fall out, or are never placed back in the bag by TSA.  Don’t allow this to happen to you.)

-          Have updated appraisals completed every five years or so (With the value of precious metals and stones going up almost every day, an item can easily appreciate in the course of a year.  While there are some policies that build in coverage for this so you can replace the item, many policies only place a stated value coverage which does not allow any increased coverage for appreciation.  These appraisals will give piece of mind that you have the correct number assigned to this item and many times the jeweler you bought the item from will update your appraisals without any cost to you. )

While insurance policies are great things, some of these things are steps you can take to protect yourself.  What other ways are you managing your risk?

 

Photo courtesy of: http://www.adweek.com/fishbowldc/files/2010/11/diamonds-1.jpg?red=dc