Do you know whether or not your current homeowner’s insurance in Los Angeles will cover damages when a disaster strikes? Here is a list of things any smart homeowner can use to help determine if their coverage is sufficient for many of the situations they may face.
Fully understanding the claims process
Different policies can promise the same amount of coverage, but may not meet expectations when it comes to making reparations after a loss. Have your agent explain in detail exactly how the agency handles claims. Will you receive a check for the entire claim upfront, or just a fraction thereof? Does the company pay for all of the lost items, or only the things that you replace?
Some policies will present the cash value for any possessions lost and wait to cover the replacement value when items are actually replaced. They’ll usually request receipts as proof. This could present a problem if no cash reserves are available. You should take inventory long before a loss occurs and keep records of all items of value.
Buying floaters is a viable option
Many times, homeowners and renters policies limit the amount that can be collected on some high valued items (like computer equipment, jewelry, furs and fine collectibles) to a fraction of the replacement value. If you know this to be true, pick up a special policy known as a “floater” or “endorsement” for each of those items.
A floater will also reimburse you if you end up losing the article. Save the bill of sale of any newly purchased item and fax a copy to the insurance agent. If the item is older, have an appraisal done. Remember to save one copy and send another to the agent. This will provide proof of ownership, and will help avoid a dispute over its value.
Keep inflation in mind annually
This is especially important with a homeowner’s policy. It may have cost $100,000 to build a home ten years ago, but it might cost you 20% to replace that same home today. Many companies offer inflation guard, which covers the increasing cost of rebuilding. When your policy comes up for renewal, talk to your agent to verify that coverage amounts reflect current costs. And if you’ve made any improvements, add it to the total.
These are a few considerations that can help to decide if your homeowners insurance in Los Angeles is sufficient for your needs.