|Protect your family and property|
|Written by Phillip Cross/Scotiabank|
|Thursday, 21 April 2011 08:17|
Brought to you by Scotiabank
Smart homeowners know that protecting what may be their biggest asset from life’s uncertainties is just good financial planning.
They know that property insurance not only makes good sense, but that it’s something most homeowners should not be without. And if you have a mortgage, your bank will require that your property be insured for at least the amount of your mortgage.
In the Caribbean, and specifically here in the Turks and Caicos Islands, many of us have witnessed how unforeseen natural occurrences can devastate a family’s assets in minutes. Luckily, though, home insurance can protect you from just about anything that could happen — beyond simply fire and theft.
It can also insure against the devastating effects of hurricanes, tornadoes, floods, lightning, earthquakes, falling trees and much more. For additional comfort, you should always insure your home for its replacement cost and protect the contents within your home.
Rebuilding and replacing
Homeowners should look for a comprehensive property insurance package with a full range of coverage and services. Take a moment to review your current coverage to ensure that it will provide sufficient funds needed to rebuild your home, replace your personal possessions, afford comparable temporary housing and even cover liability to other people, should someone get hurt while on your property.
Remember that comprehensive coverage can still provide excellent value at a reasonable price. And it can mean getting your family back on its feet after disaster strikes and saving your investments.
Be extremely careful not to underinsure your home. Although it might seem financially sensible to pay the lowest amount possible on home insurance, this could be devastating to your family’s financial situation if a tragic event occurs.
If your home will cost $500,000 to rebuild but you choose only to insure the property for $300,000 and you suffer a complete loss, most insurance companies will only reimburse you for the percentage of the amount you are insured for. In this example, you are insured for 60 percent of the cost to rebuild your home, so you may only receive 60 percent of the amount you are insured for, or $180,000. This could severely impact your families’ financial situation.
What lies within
It’s also important for homeowners to consider more than just their home, but also what lies within — their furniture and personal belongings. Taking stock of the often-substantial replacement value of their belongings leads many homeowners to add contents coverage to their property insurance for truly comprehensive protection.
A great way to determine how much content insurance to buy is to inventory each room. While this can be a lot of work if you do it in detail, it’s well worth the effort, ensuring that you have sufficient coverage should you ever need it.
It is also invaluable to have that inventory if you ever have to put in a claim. Remember to periodically review your list and adjust your insurance if necessary for new purchases — or items you no longer have.
Rates and coverage can vary, so it’s important to compare what’s covered and what’s not. Make sure you’re completely clear about whether your valuable electronic or computer equipment, for instance, is covered. If it’s not, you’ll want to purchase additional coverage, as many plans limit the amount payable for such items.
Also ask whether your plan will cover the loss of cash, cheques, travel tickets or travelers’ cheques, as well as the financial misuse of your credit or cash card if stolen.
Insure work in progress
If you decide to build your home, you’ll need to get what’s known as progressive builders insurance — or contract works or construction insurance. This covers work in progress and materials on the site while your home is under construction.
It provides coverage against the same perils as standard home insurance, such as fire and theft. Once your house is ready, it’s time to replace your progressive builders’ policy with a regular homeowner’s policy.
It’s safe to say property insurance is essential once you’re a homeowner, but the level of coverage you choose will be an individual decision.
Property insurance can be a true home-saver and provide continued peace of mind. See your Scotiabank specialist to discuss the Scotia Home Protection Plan to protect your family and your assets.
Look beyond your home
When you’re a homeowner, you may consider your home to be your biggest asset. But if you think about it, you are your family’s biggest asset. Chances are, without you there would be no home. So be sure to insure both your home and yourself to safeguard your family’s future financial health.
That’s why you should consider another popular form of insurance — Credit Life and Critical Illness Insurance — that goes hand in hand with property insurance once you’re a homeowner. Simply put, it pays the balance of your mortgage in the event of your death or diagnosis of a critical illness.
This can spare your family financial hardship and ensure your investment is there for your family.
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