TOPEKA, Kan. — As Kansans ready themselves for fall and winter, they might want to consider a homeowners insurance checkup.
“Whether you are a renter or a homeowner, we at the Kansas Insurance Department (KID) suggest a review of your insurance policies annually,” said Ken Selzer, CPA, Commissioner of Insurance. “An annual review lets you brush up on what is covered and evaluate whether the coverage is still adequate (or too much) for your current situation.”
When reviewing your homeowners policy, Commissioner Selzer suggests finding the answers to these three questions:
What does my homeowners or renters policy cover?
A homeowners insurance policy covers the structure, belongings and legal obligations if someone is injured at your home. A renters policy does not insure the structure, but otherwise provides similar coverage.
Check the type of replacement value provided in the policy. Actual cash value (ACV) is the amount it would take to repair damage to a home or to replace its contents after allowing for depreciation. Replacement cost is the amount it would take to rebuild or replace a home and its contents with similar quality materials or goods, without deducting for depreciation.
Liability insurance protects you from legal obligations arising from accidents involving visiting non-residents. With a few exceptions, such as auto or boating accidents, allpurpose liability coverage follows wherever you go. An umbrella policy can extend the liability limits of a homeowners or renters policy if the policy limit is insufficient.
Homeowners and renters policies typically include limited medical expense payments for injuries occurring on your premises to visiting non-residents.
How much coverage do I need?
Making a home inventory is the best way to determine the appropriate level of coverage needed for contents. An inventory is also a useful tool to have in case of a loss. When compiling the inventory, make sure to include as much detail as possible about the items.
Homeowners do not need to insure the value of the land a home sits on, but coverage should include any outdoor structures on the property. Both homeowners and renters should concentrate on an accurate list of belongings and a proper level for liability limits.
There are two easy ways to do a home inventory: Download KID’s Personal Home Inventory booklet from our website, www.ksinsurance.org, and fill in the information, or use the MyHOME Scr.APP.book smartphone application available from your phone’s app store.
What are my deductibles and discounts?
Deductibles and discounts are generally the easiest places to save money. Most companies offer discounts for people who have more than one type of insurance policy with them, and for people who have had few claims. When it comes to the deductible — which is the amount you have to pay if there is a loss — usually the higher it is, the lower the premium. It’s normal to consider raising a deductible to save on premium, but remember, your share of the bill will be that much more following a claim.
After reviewing the policy, call your agent or insurance company and ask these questions:
- Is the coverage on my home/rental unit and its contents adequate? Is it too much?
- Is my premium as low as I can expect it to be? Are there additional discounts available? Can /Should I raise my deductible?
- Are there risk mitigation programs and discounts available? Mitigation — taking steps to reduce a potential loss before it happens — can help limit your home’s exposure to certain local risks.
- Are there any losses such as flood or earthquake damage that are not covered in my current policy? Neither flood nor earthquake is covered by a standard homeowners or renters policy. There are optional insurance policies for both disasters. Ask about available options or visit www.Floodsmart.gov for details on flood insurance.
- Has anything changed in my coverage in the last year? Insurers may change policy terms at renewal, but they must notify you first. Read all notices and information sent from the insurance company.
For more information about homeowners or renters insurance and the basic coverages in a policy, go to www.ksinsurance.org and read or download our publication “Homeowners and Renters Insurance Shopper’s Guide.” You can also visit www.InsureUonline.org and choose the life stage that best fits your life situation.
For specific questions about coverages or about an insurance company or agent, call the KID Consumer Assistance Hotline (in Kansas) at 800-432-2484.
Source: Kansas Insurance Department