Remodeling Your Insurance After Remodeling Your Home

The benefits of renovating your home make the expense an intelligent investment, but protecting that investment is paramount.  That’s why you should consider remodeling your homeowners insurance as well.

Renovations often result in homeowners insurance coverage shortfalls in two areas: dwelling protection—which involves structural improvements to your home—and personal property protection.  Built-in enhancements such as new windows, doors, custom cabinets, granite countertops, bars, islands, and flooring need to be brought to the attention of your insurance agent.  You also should discuss any major personal property purchases, including appliances, furnishings, and decorator curtains and blinds.

When insuring personal property—especially appliances and electronics—check to see that your policy covers replacement value of your property, rather than the actual cash value.  The actual cash value consists of the replacement cost of an item less the amount it may have depreciated.  Appliances and electronics depreciate quickly.  The amount your homeowners insurance will pay for a depreciated item usually is not enough to replace it with a new one.  Unless you enjoy cruising the thrift stores, you should opt for replacement value.  That way you can shop at Circuit City instead of the Salvation Army.

Keeping your homeowners insurance agent in the loop is a good practice in general, but a major remodel should prompt an immediate conversation.  If something happens tomorrow, you want to make sure your homeowner’s insurance will replace what you have today—not what you had yesterday.

Term Life Insurance for New Homeowners

Buying term life insurance for your family is a great gift that you can offer them by allowing them to continue to live in your beautiful new home, even if you should happen to pass away unexpectedly before the mortgage is paid off.

Buying a home can be an extremely tedious, stressful and lengthy process.  Your emotions will run the full spectrum from fear and anxiety to total elation, and you will probably find yourself wondering if was the right decision, or if you really can afford it.

When it comes to buying term life insurance for new homeowners, the most important consideration is whether or not your life insurance payout will be enough to pay off your mortgage as well as to support your family until they can support themselves.  Even if your spouse decides to take on the monthly mortgage payments for tax purposes, will the insurance benefit offered to him or her be enough to sustain them completely for the rest of the time on the home loan?

3 Key Term Life Insurance Tips:

1) All term life insurance policies are developed to be the most cost effective but you should still shop around to make sure you are getting the best deal out there.

2) Shop around and obtain as many term life insurance quotes as you can to ensure that you are getting the best price and the best coverage to protect your family in the event of your death.  You may find the exact same coverage in several different carriers, but may be cheaper in some states and much more expensive in others.

3) Make sure you are getting the right kind of term life insurance.  Because there are three different forms and each is a little different and offers a different level of benefits at different monthly rates.

It's difficult to think about the potential of a tragedy, but thinking about term life insurance is an unfortunate but necessary part of every family's financial planning plan.

Eliminating PMI

You have to insure your home. But do you really have to insure that mortgage too? It's called private mortgage insurance, and according to money expert Stacy Johnson, for many people, it's expensive and unnecessary.  Watch the short video (1:24) and tell us what you think.

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Saving Money on Homeowner Insurance

Insurance may be necessary, but it doesn't have to be expensive.  Stacy Johnson brings you a way to save on homeowner's insurance.

If you have any questions about how to save money on your homeowner's insurance, leave your question below by clicking on the comment link.  Your Email Address, although needed to send us your question, will NEVER be published here to protect your privacy.

Should You Insure Your Landscaping?

You've bought a house and insured the structure, the furniture and your most prized possessions.  Should you also insure your trees and shrubs?

Check your homeowner's policy.  You'll probably find that coverage for your landscape is quite limited.  Most basic homeowner's policies pay a certain percentage, say 5%, of the total coverage limit of the home for damaged landscaping, with payouts for any one tree, shrub or other plant capped at $5,000.

Homeowners' policies typically only cover losses in certain situations — like fire, lightning, explosions, theft, riot and civil commotion or damage from passing cars. If a tree falls on an insured structure during a wind, ice, snow or hailstorm, policies will pay to remove the tree and to repair the structure. But they usually won't pay to replace a tree felled by a storm.

Since weather-watchers have predicted more severe storms in the coming years, many homeowners are looking to add wind riders to their policies, but check with your carrier, since not every insurance company offers such policies or riders.

Even if you can't get or don't have insurance on your trees and incur a loss, you still may be able to claim a deduction for such a casualty loss on your federal income tax.  The Internal Revenue Service defines such a loss as "resulting from an identifiable event of sudden, unexpected, or unusual nature," and includes the usual incidents that most insurance companies cover, as well as storms, floods, vandalism and soil and air pollution.