Although most homeowners are familiar with Part I of their homeowners policy, which covers a dwelling and its contents, they may be surprised to discover the extent to which Part II of a standard policy might protect against bodily injury and property damage a family member may cause others.

Part II protects you up to a stated limit for comprehensive personal liability. This portion of your homeowners policy covers everyone in the family, including pets, against personal injury or property damage to others due to negligence on or off the premises. This no-fault coverage typically ranges from $100,000 to $300,000 and often includes coverage for medical expenses as a result of injuries. In the event legal action is taken against you, damages and legal fees may be covered up to your coverage limit.

For additional liability protection, consider a personal umbrella policy. It may cover claims in excess of your basic homeowners coverage, or protect you against perils not covered by your typical homeowners policy, such as liability for libel or slander.

Your Homeowners Policy: Weathering a Storm

Basic coverage also protects against some natural disasters, but not all. Flood and earthquake coverages, for instance, must be purchased separately. Keep in mind also, that for damage resulting from a covered incident, nearly all policies require a dwelling coverage limit of at least 80% of the replacement cost of the home. Following are some natural occurrences that are usually covered by an average homeowners insurance policy:

Wind, Lightning, and Hail. Damage to your home and property caused by winds associated with thunderstorms, tornadoes, and hurricanes, or by lightning or hail, is generally covered. You might wonder, "What happens if one of my trees falls down and damages my neighbor's house?" In some cases, your homeowners policy may pay to remove the debris and repair any damages the falling tree caused, just as it may pay if your mailman were to fall on your icy walkway and become injured. Your policy generally will pay (within specified limits) for losses to your own property, as well as those for which you are held liable.

Snow. If part of your roof collapses under the weight of snow, sleet, or ice, your homeowners policy will generally pay for any necessary repairs.

To determine which weather-related risks or other natural disasters are excluded from coverage, check your "policy exclusions." Some typical exclusions are:

Earthquake, Flood, and Sewer Backup. Most homeowners policies do not automatically cover damages caused by earthquake, flood, or sewer backup, although you may be able to add earthquake or sewer backup coverage to your policy by special endorsement.

Flood insurance, in particular, may be required if your home is located within a declared "flood zone." The only way you can protect your home and belongings from flood damage is with a policy backed by the National Flood Insurance Program (NFIP), a division of the Federal Emergency Management Agency (FEMA). According to FEMA, a preferred risk policy costs a little over $100. The average policy in a designated area costs a little more than $300 a year for about $100,000 of property coverage. In contrast, a disaster home loan for $50,000 can cost you more than $300 a month for 20 years.

Landslides, Mudslides, Tidal Waves, and Ocean Storms. Landslides, mudslides, tidal waves, and wave damage in coastal areas are excluded from most homeowners policies, but coverage for these disasters may be available separately (damage caused by wave action is included in flood policies, for example). Like earthquakes, these hazards generally affect individuals in only certain geographic areas.

Additional Living Expenses

In the event damage to your home prevents you from living there, your homeowners policy may cover your substitute living expenses, such as hotel bills or apartment rent, and restaurant meals. A limit usually applies, equal to a certain percentage of the coverage on your house, but increased coverage may be available at an additional cost. A time frame for repairs may also apply. To help ensure the reimbursement process goes as smoothly as possible, keep expenses reasonable and save all receipts.

We would be happy to review your coverage with you. Please feel free to give us a call.

 Is your family heirloom a hidden treasure? Television shows featuring auctions and appraisal fairs have ushered the art of appraising into the limelight with fascinating stories—an ancient artifact unknowingly passed down from generation to generation; a rare trinket picked up at a yard sale; an historic relic found tucked away in the corner of an attic. While appraisals occasionally lead to surprising discoveries, they may also play a key role in developing financial plans. If you know you own expensive items, such as antiques or artwork—or even think you might—consider having your valuables appraised for insurance, estate planning, and tax purposes.

An appraisal is an expert valuation of property. Appraisers, practitioners of valuation, are professionals trained to provide more than a guess at an object's worth—they assess value based on formal methodology and comply with standards and codes of conduct generally practiced in the field. An appraisal can help you make informed financial decisions, as well as provide you with professionally prepared documentation should you need to validate your property's worth to a third party, such as an insurer.

Property Protection

Appraisals can help you secure appropriate insurance coverage, plan your estate, and develop tax strategies. You may not be able to put a price on your antique clock, but an independent appraiser can. Knowing the worth of your valuables can help you tailor your financial plan to your needs.

For insurance purposes, valuation can help you choose appropriate coverage for your property, as well as receive the reimbursement you are entitled to, in the event you need to file a claim. In general, the maximum benefit under homeowners insurance policies applied to the contents of a home is 50% of the coverage bought for the house, though it may be as much as 75% under some policies. Furthermore, most homeowners policies limit coverage for expensive items, such as furs, jewelry, and silver, but do offer extra protection at additional cost.

Under most standard policies, the most that may be claimed for loss to a particular category of property (such as jewelry or furs or firearms, for example) is limited ($1,500 or $2,500 is common). The category limitations may be increased for an additional premium. Broader coverage, covering losses that are not included in the basic policy, such as mysterious disappearance or breakage, can be obtained via a "scheduled personal property endorsement." This coverage extension will usually require you to supply bills of sale or appraisals dated within the last few years. Choosing the best approach, either by increasing the existing limits of coverage or scheduling items separately, depends on the possessions involved and the premium formulas of the insurance company.

Appraisals may play a valuable role in your overall financial plan. They can help you determine your insurance coverage, as well as your estate and tax strategies. Consider appraising your prized possessions before the need arises.

The amount of insurance you need can change a great deal from year to year. As a result, evaluating your insurance coverage should always be added to your list of annual reviews. It is important to check for any gaps in your coverage and make sure you are properly protected.

To refresh your memory on the amount of insurance you have, and what it covers, it is a good idea to carefully read both your auto and homeowners or renters insurance policies. Be sure you are familiar with their provisions and exclusions. Here are some issues to consider when reviewing your coverage.

Auto Insurance

If you were in a serious accident, would you have enough coverage? Check the types and amounts of insurance you have and make sure that your liability limits are sufficient. If you wish to save money on your premiums, consider increasing your collision and comprehensive deductibles.

Homeowners and Renters Insurance

No one likes to think about the prospect of having their home burglarized or destroyed by a natural disaster. However, you need to be prepared for the possibility. It is essential to have enough insurance coverage to rebuild your home and replace its contents at today's costs.

An independent appraiser or our office can help you estimate the current cost of rebuilding your home. If you are unsure of the value of your possessions, a home inventory and appraisal of valuable, unique items may be beneficial. Make a detailed list of all your personal belongings, then photograph or videotape each room in your home, including closets and cabinets. Be sure to keep important receipts, document the serial numbers of your appliances and electronic equipment, and store a copy of the final inventory in a safe place away from home.

Are There Gaps in Your Coverage?

As part of your insurance review, you need to recognize that your basic homeowner policy and auto policy may not be enough to cover your current needs. For instance, you may need additional insurance to protect your home and its contents against a flood or earthquake. Or, if you own valuables, you might need to insure them separately.

Most people, especially homeowners or those with substantial assets, should consider a personal umbrella liability policy. Personal umbrellas provide at lseast one million dollars in excess liability limits and broaden protection to include many situations that basic policies do not cover. This coverage is becoming more and more important as individuals are becoming increasingly willing to initiate litigation aimed at recovering large damage awards.

If you have any questions concerning your insurance program, please do not hesitate to call on us for assistance. We would be happy to explain anything in your insurance policies and help you fill in any gaps in your coverage.

Would you like to reduce the cost of insuring your vehicle? It may be simpler than you think. Here are some tips that can help you save money on your auto insurance:

• Raise your deductibles. Higher deductibles mean you assume more of the risk for small claims.
  
• Drive defensively. Traffic violations and accidents can raise your premiums.
  
• Buy a low-profile car. Driving a low-profile vehicle can reward you with lower rates.
  
• Reduce insurance on older cars. As your car ages and loses value, you may not need physical damage (collision and comprehensive) coverage any longer.
  
• Inquire about discounts. Many insurers offer policy discounts for a variety of reasons.
  
• Update your policy, as necessary. Changing circumstances may make you eligible for lower rates.
  

Following the above tips may help you keep your costs to a minimum and ensure a "smooth ride" with the proper insurance coverage. Please feel free to give us a call. We would be glad to discuss your coverage options with you.