The other night I was awoken by a pretty severe thunderstorm. Bright lightning and heavy rains lasted throughout the night. By daybreak, it had rained nearly three inches in the span of six hours. Naturally, I thought, “time for an article.” The heavy rain made me think about what would happen in the event of a flood. The reason why is that most home insurance policies specifically exclude damage from flooding. That is, if water seeps into a basement from heavy rains and damages the area, homeowner’s insurance would not apply. A specific flood insurance policy is needed. However, flood is not the only peril home insurance policies will generally exclude. In many cases, most home policies will exclude the following perils. Flood Earthquake Neglect Termites War Intentional loss Additionally, most home policies (including renters or condo insurance) will exclude or limit coverage on personal property for the following. Business […]
home insurance
5 Things to Check on Your Homeowners Policy
Just because an individual has a homeowners policy or renters insurance doesn’t mean that they are covered for everything. Sometimes individuals assume that because they have insurance, they don’t need to worry about checking into specifics. However, without understanding what may or may not be covered, in the event of a claim, it’s better to know beforehand rather than adding insult to injury and finding out there wasn’t coverage. Flood coverage. In most cases this is excluded on a homeowners policy. Coverage can be obtained separately through a broker found here. Additionally, many policies exclude water or sewer back-up. Individuals concerned about water/sewer back-up can generally get an endorsement for this coverage added to their policy. Trampolines and pools. Individuals that have a trampoline or a pool (or recently acquired these items) should notify their insurance carrier immediately. Some carriers will specifically exclude any liability claims resulting from injury or […]
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A Risk Management Checklist
Although many individuals have various risk management policies in place, sometimes those policies get brushed aside and every once in a while the dust needs to be wiped off of them and perhaps some updating needed. Here’s a checklist to consider the next time you review your risk management strategies. Auto Insurance – Review your coverage to make sure it’s still adequate. Liability limits of at least $250,000 should be the norm. Limits of $500,000 up to $1 million are better. If you drive an older car, consider raising your comp and collision deductibles or eliminating them altogether to save on premiums. Upside down on your car loan? Consider gap insurance. Better yet, don’t have a car loan. Home Insurance – Make sure your home is insured to its reconstruction cost. This is the cost to rebuild your home using today’s prices for materials, labor, etc. It is NOT the […]
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The Power of Endorsements
Whether you rent or own your home chances are you have (or should consider having) renter’s or homeowner’s insurance. Generally these insurances cover you in the event of being liable for damages or if you suffer a loss of your own due to a fire, tornado, hurricane, etc. What many polices do not cover or provide very limited coverage on is specific items such as jewelry, antiques, coins, firearms, etc. Generally if there is coverage for these items it’s for an aggregate amount not to exceed a certain dollar limit – such as $1,000 for the total amount lost. For example, Herb has an extensive coin collection worth $50,000 and his wife Peaches has an engagement ring worth $10,000. Under their normal home policy, if there was a theft, fire or tornado causing a total loss of their coins and ring, they may only get up $2,000 (assuming the aggregate […]
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A Stable Pyramid
One of the basic fundamentals regarding financial planning and saving money revolves around what is known as the financial planning pyramid. You may hear other names such as the wealth management pyramid, the financial house, etc. You may also see different stages or “building blocks” added here or there, but I’ve broken it down for the purpose of this book to three basic levels for easier understanding. The first level is where we see risk management. This is the foundation of your plan. It’s important to have a strong base to build off of, otherwise the slightest of breezes or tremors can send it toppling. Risk management can be simply seen as your insurance – and this can range from your auto, home, renters, life, health, disability, and umbrella insurance, to your will, emergency fund, and debt management. The reason why insurance is the base is due to the fact […]
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Are You Protected?
I recently received a call from a friend of mine asking questions about his newly acquired rental property. He had just moved from a duplex where he owned the entire duplex and lived on one side. Having purchased a home and finding a new tenant to replace where he was living, he was surprised and upset when his insurance on the duplex nearly doubled. After some debate he decided to reduce the replacement cost of the building that the insurance company had placed on the building from $500,000 to $250,000. This, of course, sent red flags flying in every direction in my brain. His first question to me was why his insurance nearly doubled. The reason was that since he was no longer a tenant in his own duplex the insurance company assesses that as more risky and adjusts the premium accordingly. He further commented that the replacement cost was […]
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Holy Priceless Collection of Etruscan Snoods
Pretty weird title right? It actually comes from the classic Batman TV series starring Adam West and Burt Ward. Burt Ward’s character, Robin was notorious for his exclamations categorizing different objects or dilemmas as righteous. How does this relate to financial planning? We all have our snoods that we collect or have value to us. When we purchase renters or homeowners insurance, we often assume that our personal property is covered under the specified limits on the policy. Normally this is 50% of the home’s insured value. But it pays to read the fine print. Most policies will only allow for coverage for certain items and only for specific limits. For example, a typical home insurance policy will cover jewelry only up to $1,000 total – for all of the jewelry you own. In order to have coverage for a specific item of jewelry such as a wedding ring, engagement […]
Sterling Raskie, MSFS, CFP®, ChFC®
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