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Does the insurance on your home and contents cover what it should?

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When shopping for home insurance you want to get the best coverage for the best rate. Typically you are looking to protect your investment and satisfy the mortgage company.

An important thing to remember is when you buy a policy it is at replacement cost to rebuild the structure not the market value of the home. In this market, replacement cost in most cases is higher than the market price of the home.

When you receive your policy, before you file it away or throw it in a drawer, you may look at the declaration page to check the coverage. The declaration page will show coverages A thru F including the dwelling limit to replace the home, policy limits to replace any unattached structures, limits to replace your contents, reimbursement if you have to live elsewhere due to a covered loss, liability coverage and medical payments coverage, as well as the policy deductible.

If you have contents worth replacing, you need to make sure you have replacement cost coverage on your contents. You might even want to take pictures to document your contents. Certainly, if you have some valuable items that require an agreed upon value, such as antique furniture, jewelry, coins, stamp collection or an expensive gun collection, you want to schedule those items and pay a separate premium for them. Otherwise, they may not be covered or covered up to special internal limits on the policy. These internal limits vary by company and form. A HO-5 policy would have higher limits then a HO-3 policy.

Some examples of internal limits are theft of firearms, from $1,000 to $5,000. Theft of silverware, $2,500 to $10,000. These are aggregate limits per occurrence. Trailers that not used with watercraft are typically covered from $1,500 to $5,000. Jewelry not scheduled is covered for $1,500 to $25,000. Portable electronic equipment, such as laptops and tablets, are covered for up to $1,500 to $2,500.

Of course, the more coverage on the policy, the higher the cost of the insurance. You need to decide what coverage is important to you, and tailor your policy to your needs. Your ally in this process is your insurance agent. You want to know the cost to protect your assets as you pay the premium not when you have a loss, so you have peace of mind.

Insurance is not that hard if you take the time to break it down and sit with your agent so he/she can explain the coverage, and make sure it suits your needs. Most people think it is a foreign language, but policy contracts have become much more readable during the past 30 years. Do not just take the lowest cost not knowing if the coverage will cover your home and belongings. Give your agent a call to request an appointment. They will help you.

Dave Pushman is the former regional vice president of Geico in Macon and is now an independent insurance agent with Tidwell and Hilburn Insurance. He can be reached at davep@th-ins.com.

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