|By Michael Hartranft, Albuquerque Journal, N.M.|
|McClatchy-Tribune Information Services|
But they might use the occasion of the devastating events on the
"Superstorm Sandy revealed many of the problems homeowners may encounter when navigating the claims process after a natural disaster," said
And to their credit, victims of the
"We had over 500 homes that were burned, and at this moment, we've had two complaints of inadequate coverage," he said. "That doesn't mean they're still not in litigation, but it seems to me the agents and the people in
Except when lenders require it to obtain financing -- which is almost always the case -- obtaining homeowner's insurance is not mandatory. But, in his mind, it's something no one should be without, Franchini said.
"When you buy a homeowner's policy or a tenant's homeowner's policy, you have protection for your assets -- your home itself and all of its contents. If you have an apartment, you insure all of its contents," he said. "Those are all of your earthly goods -- and for most of us, that's all we have."
A standard homeowner's policy covers three basic things: property damage to your home and detached buildings, whether from fire, hail, wind "or a vehicle running into your property;" reimbursement to live some- where else if your home is damaged and uninhabitable; and personal liability to protect against claims if you are responsible for injuries to others or damage to their property.
People often overlook the importance of personal liability, "whether you own a home or are just renting," Franchini said.
"If someone comes to your residence and you have something that's unsafe, like a step they trip on and get hurt, your personal liability protects you," he said.
There's no general rule about how much property or personal liability coverage a homeowner should have, Franchini said. Both coverages typically start at
"That's why a good, professional insurance agent can help someone decide what their needs are and what their exposures are and what they're willing to assume themselves," he said. "Anything above that should be insured."
There are certain "perils" homeowner's policies won't cover, chief among them flooding and earthquakes. Coverage for those would have to be provided in separate policies, said
In the case of floods, federally regulated lenders are mandated to require flood insurance on properties located in areas at high risk of flooding. They can also require it even if it isn't federally required.
"People who live here in
It also isn't common knowledge
People who live in federally designated flood zones can obtain subsidized insurance through the National Flood Insurance Program, Franchini said.
"There are also private carriers that write flood insurance, and write difference-in-condition coverage, which covers you for flood and earthquake, earth movement, things like that that are not covered in your homeowner's policy," he said.
Franchini said it is important for homeowners to annually review their policies, and to update them if necessary.
"Look at an inventory of all your contents. If you have any paintings, if you have any important goods like jewelry or anything like that, you need to know what they are," he said. "You need to take pictures of them and have an inventory of your premises so you can prove what you have."
He said he keeps his inventory list in a safety deposit box at the bank.
Homeowners should also be wary of the impact of the downturn in market values for their homes.
"The cost to buy a house has gone down, but the cost to build a house has not," Franchini said. "What that means is ... if you have a house that was worth
Turbett said with the rash of disasters the past couple of years, homeowner's claims have skyrocketed -- and it is having an impact on
"What's happening is there are a lot of carriers now requiring an auto policy along with the homeowner's policy if they're going to write it," he said. "They perceive auto as a line of insurance that is more profitable so they're making the agents bundle those policies ...
"It's limiting choice because obviously before you could buy a homeowner's policy stand-alone."
He said consumers should be aware there are options. "If they're having that issue, they should shop around and look at the best price."
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