By Rob Jupille
The recent wildfires in Southern California have again brought the topic of homeowners insurance to the forefront. Fire doesn’t discriminate between rich and poor, freelancers or employees. Here’s what to be aware of when shopping for or reviewing your insurance.
Replacement Cost
Periodically review the amount for which your home is insured in order to be sure that you have enough coverage to rebuild if it suffers a loss. As little as 10 years ago, you could rebuild the average home for $100 per square foot or less. Today that number ranges from $150 to $500 per square foot. In addition to providing enough coverage to rebuild your home, the other coverages on your policy, including those for the contents of your home and living-expense coverage, are derived from the amount of dwelling coverage you choose.
Sublimits for Some Items
Most people don’t read their policies (unless they need a cure for insomnia). But the standard policy has sublimits for certain types of property. The most common include:
* $250 in coverage for cash, coins, etc. If you routinely keep more than that on your premises you could suffer a substantial loss.
* $1,500 for jewelry, collectibles, fur, watches, valuable papers and other items. If you own individual pieces of jewelry worth more than $1,500 or have artwork in your house of any value, you should get it appraised and purchase additional insurance for those items.
* $2,500 for business property. This sublimit is particularly important to freelancers who work full or part-time out of their homes and routinely keep business property there. You should consider a separate business property policy to ensure that you’ve got adequate coverage for your equipment, regardless of its location.
Standard Exclusions
* Earth Movement. Both earthquakes and mudslides are considered earth movement and are not covered on your homeowners policy. Separate earthquake policies can be purchased but, unfortunately, there is no such thing as a policy to cover a mudslide.
* Water Damage, including damage caused by a flood, water that seeps up through the ground, or backs up through sewers and drains, is specifically excluded.
Your Duties After a Loss
Most policies require that, should you suffer a loss, you must do certain things to maintain coverage. Among these:
* Notify your company “promptly” of the loss.
* Mitigate the damage to the best of your ability.
* Cooperate with the insurance company by providing it the information it requests in order to process your claim.
Rob Jupille can be reached at (310) 587-3370 or emailed at [email protected].
Written by Rob Jupille
