Homeowners, condo and renters insurance: 5 things to know

Whether it's your first apartment, a starter home or a retirement condo, we can help you find a policy that protects your property - and most of your other important stuff, too. Home, condo and renters insurance takes the worry out of unexpected events, like falling trees, slippery sidewalks and break-ins.
Here are the five most important things to know as you compare prices and coverage:

1. You should buy enough home insurance to cover the cost of rebuilding.
One of the most common mistakes people make when shopping for home insurance is thinking the coverage should equal the home's market value. But home insurance is designed to pay for the cost to rebuild your home if it's destroyed. That amount might be lower or higher than what you paid for the house. In recent years many homeowners who lost homes in disasters found themselves caught short because they were underinsured.
A good home insurance agent can help you estimate, and it wouldn't hurt to ask a local contractor about building costs in your area. Online calculators to estimate the replacement cost are also available through services such as HMFacts andAccuCoverage.

2. Your landlord's insurance won't cover your stuff.
Don't expect the landlord to help you replace anything if disaster strikes. His insurance covers the building -- not your things. Buy renters insurance to protect your belongings in case they're stolen or damaged by fire or other perils. Like home insurance, renters insurance also provides liability coverage in case you unwittingly injure others or damage their property and are held responsible.

3. A good inventory is worth your time.

Conduct an inventory to find out how much coverage you need. Check whether your insurance company offers an inventory app, or use the Insurance Information Institute's free online software at KnowYourStuff.org to help catalog everything. Beware that standard home and renters insurance policies place dollar limits on coverage for valuables and special collections, so you might need to buy additional coverage for those items. Besides helping you determine how much coverage you need, an inventory helps the claims process go smoothly if something unfortunate happens.

4. Replacement cost coverage may be worth the extra expense.
Replacement cost coverage is pricier than actual cash value coverage, and here's why. With replacement cost coverage, the policy reimburses you to buy a new, comparable item to replace the one that was damaged. Actual cash value coverage pays you the current market value of the item that was damaged or destroyed. Say, for instance, a pipe burst and ruined a 5-year-old couch. Replacement cost coverage would pay for a new sofa. Actual cash value coverage would reimburse you for cost of a new sofa minus five years of depreciation.

5. A home or renters insurance policy doesn't cover everything.
Standard home and renters insurance policies do not cover damage from earthquakes or floods. You need to buy separate insurance policies for coverage in case either of those disasters strikes. Home and renters insurance also don't provide any liability coverage for business activities, even when the business is conducted from your home office. And they limit coverage for business-related property.



How much you pay for auto insurance depends o­n several factors, including your age and marital status, where you live, and what you drive. You can't do anything about your age, and few people will move just to lower their insurance premium. You can, however, choose a vehicle that costs less to insure.
What is your car insurance actually insuring? Although you're buying a single insurance policy covering a specific vehicle, a number of components make up the final cost:
·        Bodily injury liability: Covers injury and death claims against you, and legal costs, if your car injures or kills someone.
·        Property damage liability: Covers claims for property that your car damages in an accident. Because liability coverage protects the other party, it is required in all but three states.
·        Medical payments: Pays for injuries to yourself and to occupants of your car. This is optional in some states. In "no-fault" states, personal injury protection replaces medical payments as part of the basic coverage.
·        Uninsured motorist protection: Covers injuries caused to you or the occupants of your car by uninsured or hit-and-run drivers. "Under-insured" coverage also is available, to cover claims you may make against a driver who has inadequate insurance. In some states, as many as 30 percent of drivers are uninsured.
·        Collision coverage: Covers damage to your car up to its book value. Collision coverage carries a deductible, which is the amount per claim you have to pay before the insurance takes effect. The lower the deductible, the higher the premium. While it is legally optional, a lending institution or leasing company usually requires collision coverage.
·        Comprehensive (physical damage): Covers damage to your car from theft, vandalism, fire, wind, flood, and other non-accident causes. Comprehensive also carries a deductible.

 Sport-utility vehicles, the hottest market segment, often have higher insurance rates than mid- and full-size cars, Insuring a high-performance car can easily cost two or three times the insurance amount for an ordinary model. However, insurance companies set rates based on their own experience. It all boils down to a company's actual experience with a particular vehicle or category of drivers. That is why it pays to shop around for insurance.
      Factors that you can least control may have the greatest impact on your insurance costs. Your age, gender, and driving record are key factors that affect your insurance premium.
·     Single males under the age of 25 pay the highest rates.
·     Convicted of moving traffic violations or of causing an accident, your premiums will likely go up, no matter what your age. Drivers with clean records         -- no tickets, no accidents -- pay the lowest rates.

     Where you live also plays a big role in how much you pay. Urban areas, with their greater population densities and heavier traffic, get higher rates than rural. 


What is final expense insurance?
Final expense insurance will pay for your funeral expenses, as well as any debts accumulated at the end of your life, which could include nursing home costs not covered by Medicare. Senior citizens used to refer to it as burial insurance.
Why do I need it?
Funerals are expensive and the price continues to rise. Even without a plot and headstone, the average funeral costs more than $8,000, and that amount has risen more than 10 times since the 1960s. Most people don't want to leave this burden to their heirs.
Are there different types of policies?

Yes. You can purchase a whole life final expense insurance policy that covers you until your death. Or you can buy a cheaper term life insurance policy that only provides coverage until you reach the age specified in the policy. Final expense insurance policies offer varying amounts of coverage and premiums. MetLife sells a $2,500 policy costing $10 a month for a 45-year-old woman because she is expected to live to age 82. (See “3 types of insurance to pay funeral expenses.”)
When should I buy it?
You can purchase a final expense insurance policy anytime between the ages of 45 and 85. Remember that the cost of the policy is lower when purchased at an earlier age since you will be paying into it over a longer period of time.
How much will it cost?
Even though premiums are usually lower because the amount of coverage isn't large, its critics still say that this type of insurance is expensive relative to what you get. They recommend exploring other types of insurance such as a traditional life policy if you want to have extra cash to cover funeral expenses.
What if I die prematurely?
The death benefit for a final expense insurance policy is graded. If you die within the first few years of coverage due to a previously known condition like heart disease your beneficiaries will not receive the full amount of the policy. However, they will usually get back what you paid in premiums, plus interest. But if your death is accidental, such as falling down a flight of stairs, most policies will pay the full benefit immediately.
Are there other options?
You could consult with a funeral director about pre-need alternatives. Or you could open up a special bank account solely for this purpose and include it in your will. Social Security provides a small death benefit, and armed forces veterans can seek help through the Veterans Administration.
What are the other end-of-life expenses?
In all probability, your children and or family will inherit other end-of-life expenses such as the cost of probating a will, paying off a home mortgage if one exists or any expenses for your final care that were not covered by insurance.
What are the advantages?
Simplicity. You can quickly and easily buy a final expense insurance policy online or on the phone.
Guaranteed acceptance. There is no medical exam.
Inexpensive premiums. The younger you are, the cheaper the cost.
What are the disadvantages?
Price. Final expense insurance is more expensive than traditional policies.
Waiting period. There is usually a two-year waiting period before the policy takes effect.
Limited coverage. You have to make sure that a final expense insurance policy will actually cover allof your final expenses. Financial planners suggest you calculate the cost of your funeral arrangements, immediate bills and long-term obligations, and then subtract that sum from the amount already in your bank account. Your final expense insurance policy should make up the difference.

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