Archive for the ‘Homeowner’s Insurance’ Category

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.

Extreme Maintenance – Home Edition (Spring)

Thursday, April 29th, 2010

Now that spring has arrived and the warm weather is upon us, many of us find ourselves cleaning out the garage and airing out the house. Home maintenance is an important practice to keep your home efficient, healthy, and structurally safe. Many of these home maintenance tips also preserve the value of your home and will save money no later repairs by keeping small problems from escalating into larger ones.

When undergoing any home projects, please keep safety in mind at all times. Do not attempt any dangerous or unfamiliar tasks on your own. If you need help, consult a qualified technician or contractor.

Outside

Roof, Attic, and Gutters

  • Inspect the roof from the ground. Look for any missing or damaged shingles as well as any bulges or sagging.
  • Inspect the gutters and drainage system to verify that all parts are properly connected and that water is being routed at least four feet from the exterior walls of your home.
  • Remove any debris from the gutters.
  • Inspect the trim and fascia for damage.
  • Inspect the roof from the inside of the attic to check for any signs of leakage or damage.

Exterior

  • Inspect wood surfaces including decks and steps. Check for rot, loose boards, or exposed nails.
  • Inspect all utility wires running to your home. Ensure that trees are not too close.
  • Consider removing dead trees.
  • Inspect walkways and driveway for damage. Fill any potholes and patch the cracks.

Windows & Doors

  • Inspect weather stripping around all windows and exterior doors.
  • Inspect screens for damage.
  • Inspect the handles and locks on all exterior doors. Ensure that they close tightly and that the locking mechanisms are secure.

Inside

Emergency Preparedness

  • Inspect your smoke detectors and fire extinguishers. The batteries in the smoke detectors need to be changed regularly and the gauge on the fire extinguisher will show the amount of pressure in the tank.
  • Hold a fire drill with family members. Practice with your children the escape routes from different parts of the house. Plan where you will meet if there is an alarm.
  • Consider a gas-powered generator to provide a backup power source to your home.
  • Consider storing a supply of nonperishable food and water. Rotate your emergency supply to prevent spoilage.

Basement

  • Inspect foundation for any shifting or cracks. Seal any cracks.
  • Inspect wood for evidence of insect damage.
  • Check for any signs of moisture or mold. Address any problems immediately.
  • Consider a dehumidifier to keep air in the basement dry.
  • Consider a sump pump to prevent water from building up on the basement floor.

Electrical

  • Test all Ground Fault Interrupter (GFI) Outlets.
  • Trip and reset all circuit breakers. (Be sure to power off any electronic devices prior to doing this).
  • Inspect the main electrical panel for any signs of damage, especially burn marks.
  • Inspect outlets for poor wiring or bad connections. These can lead to electrical fires.
  • Consider replacing low-efficiency lightbulbs with high-efficiency bulbs.

Plumbing

  • Use drain cleaning solution on any slow drains.
  • Remove buildup from plumbing traps.
  • Inspect water heater for any sign of water leakage. Make sure there is proper ventilation if you have a gas-powered heater.
  • Test shutoff valves for all plumbing fixtures.
  • Check all faucets and beneath every sink for evidence of leakage.

Kitchen

  • Vacuum the refrigerator coils.
  • Remove any ice buildup from your freezer.
  • Deep-clean the oven and stove.

Air Conditioning System

  • Clean the filter and condenser.
  • Listen for any abnormal sounds.
  • Check to make sure the system works before the heat sets in. If your system needs to be serviced, you should take care of it early on.