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Unfortunately, many homeowners discover that they are not covered until after a disaster occurs. Below are some tips to follow that will ensure you have the protection you need.

Understand the claims process
Many policies are very similar to each other, offering identical coverage. However, these same two policies can be very different when it comes to settling claims. It is important that you determine exactly how claims are handled. Are you going to receive the entire claim upfront, or only a portion of it? Will you be compensated for everything you have lost, or only the items you replace?


It is common for some policies to grant you the cash value of your possessions right after your loss, and wait to reimburse the replacement value once you the items are replaced. You will be asked to provide receipts as proof. This scenario can be problematic if you have no money to buy the items that need to be replaced.

Equally vital is the amount of time you have to replace your items. For example, if you are going to have to pay to stay in a hotel, you probably are not going to want to go on a shopping spree any time soon. Ask your agent how long you have to replace your stuff.

Take inventory
There are two steps involved with filing a claim -- being able to prove that you owned certain items and confirming their value. This is simpler to do when you still own these things. Use a video camera to record all of your items that you own on tape. Make sure that you go through your entire home. An alternate method is to write a list and take several roles of film. Store your video or pictures somewhere safe, like a safety deposit box.

Purchase floaters
It is very common for a homeowners policies to limit the amount of money that can be collected on large ticket items. For example, you will only be able to receive a fraction of the actual value on items like jewelry, computer equipment, furs and other types of fine collectibles  You can purchase a 'floater' for each of these items. Floaters will replace damaged goods as well as lost items. Keep receipts for new purchases and have older goods appraised. All receipts and paperwork confirming ownership and price should be faxed to your agent so that you never have to worry about having to prove that you possessed an item or how much it is worth.

Always consider the cost of inflation
It may have cost you $150,000 to build a new home 10 years ago. However, it would cost $250,000 to replace today. Some insurance carriers offer 'inflation guard', which will cover the increasing cost of having to rebuild. It is important to ask your agent if your policy offers this.

Co-op and condo owners need to protect their property
This entails contacting the condo board and making sure that there is a policy in place that protects the common areas. Make sure you obtain a copy. In addition examine the association bylaws to determine what aspects of the home you must cover.


Condo owners are going to need more insurance than renters being that their contents policy is going to need to cover things like fixtures and cabinets.

Assessment coverage should also be considered for condo owners. If their is a loss that is to big to be covered by the condo association's policy, or if there is a hefty deductible, the association will split the additional costs among the members in the form of an assessment. With assessment coverage, your insurance carrier pays the bill.

Think about buying earthquake and flood insurance
Obviously these types of insurance are not for everyone. However, if you live in an area that is prone to any type of natural disaster, it is important to note that almost no property policies cover these disasters. There are independent carriers that do offer both. If you need flood insurance, contact the National Flood Insurance Program. Californians can obtain earthquake insurance through the California Earthquake Authority.

Buy an umbrella policy
If somebody gets hurt on your property, your liability insurance will top out at $300,000. However, nobody sues for $300,000. The lawsuits usually start at $1million. Umbrella policies are relatively inexpensive for what they offer. A couple of hundred dollars/years equates to one or two million worth of coverage.

Contact your agent after a life changing event
Getting divorced or married? Kids moving out, or back home? The amount of coverage you need changes over the years. Staying in touch with your agent will result in being up-to-date on your policies and inventories.

Related Reading:
-Private Mortgage Insurance


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