On the Home Front
Insuring Your Biggest Investment
By Nicole Ball and Amie Pisano
Over the course of the past few months, the word “risk” has become commonplace. We now think about our health and safety in ways we previously never considered. With so much out of our control, it can be comforting to find ways to actively minimize risk in our lives.
One easy way is to secure the best homeowners’ insurance to protect your home — the place that has become office, school, gym, and everything in between. If the unthinkable happens — fire, flood, burglary — you want to be as prepared as possible to deal with the loss.
Understanding homeowners’ insurance doesn’t have to be overwhelming. To help, we sat down with State Farm agent J.R. Orenstein, who shared some helpful information.
- Shop around. Make sure you feel comfortable with your insurance company and agent, because when you suffer a major loss or damage to your home, they will be the ones who will take care of you.
- Companies and policies vary. They offer different coverages, coverage limits, options, and discounts.
- Flooding. Flood damage is not covered by homeowners’ insurance. You must have a separate flood insurance policy to be covered in the event that groundwater comes into your home.
- Deductibles. This is what you pay out-of-pocket before the insurance company begins reimbursing you for the loss. The higher your deductible, the lower your premium.
- Loss of use coverage. This provides money towards living expenses in the event your home is temporarily unlivable. Check to see how much the company offers.
- Ask about discounts. Some common discounts include being claim-free for the last three to five years, combining your home and auto, and having a fire/burglar alarm system.
- Liability coverage. This is lawsuit protection. Think about how much you have to lose. You have the house, but you may also have savings, investments, and other assets, including the most overlooked asset — your income. Ask if you’re eligible for an Umbrella Policy, which offers the most comprehensive way to protect assets.
- Jewelry coverage. Most homeowners’ policies have a small cap. To guarantee full replacement of any piece of jewelry, speak to an advisor about options and requirements.
- Sewage backup. Coverage for drain or sewage backup is commonly optional but should always be a part of your policy. If you have water back-up into your house from the bathtub, sink, or toilet, you could end up paying thousands out-of-pocket if you don’t have this inexpensive coverage.
- Review your insurance policies annually. Not only will your needs and priorities change from year to year, but there may also be changes in coverage and available discounts upon renewal.
Being an educated homeowner and insurance consumer will help you find a policy that is the best fit for your needs at the best price, and hopefully, provide some peace of mind.
<Nicole Ball and Amie Pisano are real estate agents with Houlihan Lawrence in Rye. J.R. Orenstein is an insurance agent with State Farm.>