Archive for the ‘Personal Insurance’ Category

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Homeowner’s Insurance Valuation

Wednesday, June 9th, 2010

When you purchase homeowner’s insurance, you have some options when it comes to choosing how you want your policy to respond when you file a claim. One of the options you have is choosing how your home and contents will be valued at the time of the loss. The options you have to choose from are often referred to as “replacement cost” and “actual cash value”. You should choose the option that best suits your individual circumstances. Here is a brief explanation:

Replacement Cost

When you choose to purchase a replacement cost policy, you’re choosing to insure your home for the full cost it would take you to rebuild your home with the same construction in the same location. With construction costs changing over time, you should evaluate the limit you carry on your policy periodically to make sure you have the right amount of coverage. Most policies also have an inflationary adjustment that is made every year that increases the coverage by a small percentage in order to keep up with inflation. Many people assume that they need to insure their home for the amount that they could get for it if they were to sell it on the real estate market. Often the market value and the replacement cost are two very different numbers.

Actual Cash Value

This valuation method calculates the value of your home with depreciation for age and condition of your home. This type of policy is generally less desirable and often more expensive than a replacement cost policy. For certain circumstances it may make better sense or be the only available option.

A Startling Fact

In 2007, 66 percent of homeowners in the U.S. were underinsured (by an average of 18 percent). When there is a total loss, meaning that the home is completely destroyed, a homeowner will not get enough insurance reimbursement to replace their home if they do not carry a high enough limit. For this reason, it’s important to insure your home to its full replacement value (for a replacement cost policy).

When you make changes to your home, make sure that you adjust the limit of insurance accordingly. Renovations such as building a garage or porch, adding an addition, or remodeling a kitchen or bathroom can add a measurable amount to the replacement cost of your home.

Posted in Homeowner's Insurance | Comments Off

Identity Fraud

Tuesday, May 11th, 2010

What it is

Identity fraud, or identity theft, is a crime where a victim’s personal information is used without their permission in the commission of a crime. Victims of identity fraud often incur thousands of dollars in out-of-pocket costs to restore their lifestyle after their personal information has been compromised by a fraudster. In addition to these costs, victims spend countless hours taking care of the restoration of their good name.

How to prevent it

Be careful and responsible with your personal information. Educate yourself about the different ways that your information can be compromised:

  • Shoulder Surfing – when someone can steal information in an ATM line, or at the grocery store, or anytime you have credit card or i.d. out in the open
  • Social Engineering/Pretexting/Phishing – when you receive mail, email, or telephone call and someone poses as someone else in order to entice you to divulge information that you give because of who you think you are talking to.
  • Social Networking – be careful of privacy on websites such as facebook, myspace, a web blog, or other websites where you may post information about yourself.
  • Stealing your wallet or purse, going through mail or trash
  • Computer Hacking – through a computer virus or malicious software, thieves can access your computer files or monitor the information you enter on the computer.

It’s a good practice to keep your information private and secure. Some information you may be required to give out. Be sure you know why the information is needed and how it will be used. Only give out information to those you trust, and only when you can confirm that they are who they claim to be.

What to do if you are a victim

  1. File a report with the police
  2. Notify your bank, credit card company, etc.
  3. Look over statements and verify activity. Dispute any transactions you did not authorize.
  4. Check your credit report (available free one time per year at http://annualcreditreport.com).

Insuring against loss to identity fraud

Many insurance carriers offer coverage for victims of identity fraud as an optional coverage that can be added on to a homeowner’s, renter’s, or automobile policy. The cost is often around $20 per year and can go a long way if you are victimized. It does not prevent your identity from being stolen, but it can make the recovery process a lot easier and save you some peace of mind.

Posted in Coverage Spotlight, Personal Insurance | Comments Off

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