Check Insurance Coverage

Review insurance policies and coverage to avoid misunderstandings later. Take advantage of flood insurance. Separate policies are needed for protection against wind and flood damage, which people frequently do not realize until it is too late. Don’t wait for a hurricane to approach; by then, it’s too late. When a storm is nearing, insurance offices are too busy preparing for the emergency and won’t be able to respond to individual requests; therefore, insurance cannot be obtained.

Inventory your property. A complete inventory of personal property will help in obtaining insurance settlements and/or tax deductions for losses.

Actual cash value is the amount it would take to repair or replace damage to your home after depreciation. This is the amount your property is worth at current market value. For example, if your roof has a 20-year warranty and is 17 years old, there would be a deduction for the age and condition of the roof. Most insurance on the contents of your home (i.e., personal belongings) is written on an actual cash value basis. Though you can insure your belongings at replacement cost, the premium will be higher.

Replacement cost is the amount it would take to replace or repair your damaged property with materials of similar kind and quality, without deducting for depreciation.

Let’s assume you purchased a television set that cost $700. If actual cash value, your insurance will not pay you the full $700. It will pay a lower figure that reflects what the television set is currently worth — let’s say $300. If you are insured for replacement cost, however, and the same television now costs $900 on the market, you will initially receive the actual cash value for your set ($300) and then the balance ($600) once you purchase the new set and present the receipt. Keep your receipts. Proof of purchase is a must to get your full reimbursement.

No matter how your home is insured, it is important to keep track of its value. Check with your agent at least once a year to make sure your policy provides adequate coverage.

If you have any questions, please contact your agent, the Insurance Consumer Service Office (561- 837-5045) or the Insurance Consumer Helpline (1-800-342-2762).