We’ve all seen the destruction of Hurricanes Harvey and Irma. Despite all of us always complaining about the weather in Michigan, I think we should be thankful we don’t get the violent weather as seen in other parts of the country. That being said, we all know that we have our fair share of inclement weather here in Michigan and Mother Nature does take her toll. As a result, it is important that from a financial standpoint we protect our home and other assets from any type of disaster whether man made or from Mother Nature. That is why Hurricanes Harvey and Irma should be a wakeup call to make sure that we are protected.
For most people our single largest purchase is our home. That is why it is so important to make sure your home and its contents are properly protected. Having homeowner’s insurance is the most popular way to protect your home and its contents; however, just having a homeowner’s policy is not sufficient. What you need to make sure is that you have the right homeowner’s insurance with the proper coverage. I know people who have had the same homeowner’s coverage for the last 20 years, and have never updated it. There is no doubt that the coverage is out of date. I cannot stress enough how important it is that you periodically review your homeowner’s coverage to make sure it fits your needs. Just because the policy fit your needs 10 years ago, doesn’t mean it fits your needs today. After all, the contents of your home and the value of your home may have changed dramatically. It is important to have a policy that keeps up with your changing needs. Therefore, if you have not sat down with your homeowner’s insurance agent for a while, now is the time to do it.
It is also important to always be fiscally responsible. Therefore, it’s also not a bad time to shop your homeowner’s insurance around. Not all insurance companies are the same and rates and coverages differ between different companies. The cheapest homeowner’s is not necessarily the best coverage for you. What you need to do is to look at your individual situation and get the coverage that best suits your situation.
Remember, when you are shopping your homeowner’s insurance around, if you use the same company that you have your auto insurance through, there generally is a discount. Therefore, it may be a good time to shop your auto insurance around as well. In addition, when you’re talking to the insurance company representatives, one question you should ask is what discounts you are entitled to. Different companies have different discount programs and my philosophy is why should you not take advantage of every discount you’re entitled to?
One last note regarding shopping your homeowner’s insurance and that is to remember that most likely, the most important thing when it comes to any type of insurance coverage is the quality of the company you’re dealing with. Obviously, you want to deal with a company that doesn’t fight you on claims but rather, treats you fairly.
Whether your homeowner’s insurance coverage is up to date or not, one thing that everyone should do is to make sure that they have a video inventory of their home. Just think how difficult it would be, if your house was destroyed like in Hurricane Harvey, to account for all that you lost. It is nearly impossible. After all, particularly if you’ve lived in your house for a long time, it’s easy to forget what you have. Therefore, what I recommend is on an occasional basis you do a video inventory of your home. You don’t have to hire anyone to do it; rather, you could just use your cell phone and give yourself a video inventory. If in the unlikely situation your house is destroyed, this video inventory could be essential in dealing with the insurance company.
As the old saying goes, an ounce of prevention is worth a ton of cure. In this situation, making sure your homeowners insurance is current and up to date and having a video inventory of your home, can make life easier if you are ever in a situation where there is damage or destruction to your home and you need to make a claim.
If you would like Rick to respond to your questions, please email him at Rick@bloomassetmanagement.com.