Are You Properly Ensured? Check This List

Real Estate

Are You Properly Ensured? Check This List
By Ken Fisher, USA TODAY
People usually regard insurance as a once-and-done purchase, but old coverage could create problems if they actually need to submit a claim.
NEW YORK – Summer’s here! Barbecues, burgers and beer. It’s a good time to review your insurance coverage. If an out-of-control cookout cooks your castle, are you prepared?

Household losses
Folks commonly see insurance as a once-and-done purchase. Renters buy policies to meet landlord requirements, auto-renew and forget it. Income-stretched homeowners often buy bare-bones policies to satisfy the bank while minimizing premiums. But “required” is often inadequate.

Old coverage may not suffice now. Have you updated your policy to cover the increased worth of your possessions? Renters’ insurance covers either depreciated cash value or replacement cost, which is pricier coverage. Depreciated value means that if you bought your sofa 10 years ago, you would get reimbursed for its current value. Replacement cost means that you would get money for a new sofa.

State Farm says average renters have $35,000 worth of stuff that their policies won’t cover. Does that describe your policy? Bankrate, a financial website, helps estimate how much renters insurance you really need.

To document your stuff’s value, try Encircle, a free app. It works room-by-room storing photos and details like value, quantity and purchase date.

Natural disasters happen
If you’re outside California, don’t think you’re earthquake safe. Quakes span much of the west. Similarly, flood insurance is an obvious buy for folks along the Gulf Coast, eastern seaboard and major rivers. But according to FEMA, low-risk areas generate over 20% of National Flood Insurance Program claims – and about one-third of flood-related federal disaster assistance. In 2017, the average paid flood insurance claim was about $92,000, according to the Insurance Information Institute and FEMA. Could you handle that? In Washington state, where I live, landslides are astoundingly common. Disasters are everywhere.

Most policies cover damage from hail, fire, wind and tornadoes. But basic policies exclude most mold. Some insurers offer mold riders, but it costs more. So does extending coverage for sewer backups. Many skip these riders. If you’re ankle-deep in sewage, the last thing you want to hear is it isn’t covered.

You’re sued and …
Most critically, make sure you’re protected from personal liability. Homeowners insurance includes lawsuit coverage. But it’s usually bare-bones. If someone suffers a catastrophic injury on your property, you can be liable for their lost income, medical bills, personal damages and trumped up trauma. Costs can mushroom, exhausting your coverage – leaving you stuck for big bucks.

Homeowners’ policies usually provide liability protection up to $100,000. If an injured guest sues you for $350,000 in medical bills, lost wages and more – you may be fried. The Insurance Information Institute has a great site to learn what policies cover and what they don’t.

A middle-class family’s umbrella policies should roughly equal their net worth. NerdWallet has a great net worth calculator to approximate that.

Copyright 2019, USATODAY.com, USA TODAY, Ken Fisher. Ken Fisher is founder of Fisher Investments.


By Ken Fisher, USA TODAY
People usually regard insurance as a once-and-done purchase, but old coverage could create problems if they actually need to submit a claim.
NEW YORK – Summer’s here! Barbecues, burgers and beer. It’s a good time to review your insurance coverage. If an out-of-control cookout cooks your castle, are you prepared?

Household losses
Folks commonly see insurance as a once-and-done purchase. Renters buy policies to meet landlord requirements, auto-renew and forget it. Income-stretched homeowners often buy bare-bones policies to satisfy the bank while minimizing premiums. But “required” is often inadequate.

Old coverage may not suffice now. Have you updated your policy to cover the increased worth of your possessions? Renters’ insurance covers either depreciated cash value or replacement cost, which is pricier coverage. Depreciated value means that if you bought your sofa 10 years ago, you would get reimbursed for its current value. Replacement cost means that you would get money for a new sofa.

State Farm says average renters have $35,000 worth of stuff that their policies won’t cover. Does that describe your policy? Bankrate, a financial website, helps estimate how much renters insurance you really need.

To document your stuff’s value, try Encircle, a free app. It works room-by-room storing photos and details like value, quantity and purchase date.

Natural disasters happen
If you’re outside California, don’t think you’re earthquake safe. Quakes span much of the west. Similarly, flood insurance is an obvious buy for folks along the Gulf Coast, eastern seaboard and major rivers. But according to FEMA, low-risk areas generate over 20% of National Flood Insurance Program claims – and about one-third of flood-related federal disaster assistance. In 2017, the average paid flood insurance claim was about $92,000, according to the Insurance Information Institute and FEMA. Could you handle that? In Washington state, where I live, landslides are astoundingly common. Disasters are everywhere.

Most policies cover damage from hail, fire, wind and tornadoes. But basic policies exclude most mold. Some insurers offer mold riders, but it costs more. So does extending coverage for sewer backups. Many skip these riders. If you’re ankle-deep in sewage, the last thing you want to hear is it isn’t covered.

You’re sued and …
Most critically, make sure you’re protected from personal liability. Homeowners insurance includes lawsuit coverage. But it’s usually bare-bones. If someone suffers a catastrophic injury on your property, you can be liable for their lost income, medical bills, personal damages and trumped up trauma. Costs can mushroom, exhausting your coverage – leaving you stuck for big bucks.

Homeowners’ policies usually provide liability protection up to $100,000. If an injured guest sues you for $350,000 in medical bills, lost wages and more – you may be fried. The Insurance Information Institute has a great site to learn what policies cover and what they don’t.

A middle-class family’s umbrella policies should roughly equal their net worth. NerdWallet has a great net worth calculator to approximate that.

Copyright 2019, USATODAY.com, USA TODAY, Ken Fisher. Ken Fisher is founder of Fisher Investments.