1. Why should you have replacement cost coverage?

Hmmm…It’s been a long time since you’ve refurnished your home. But that sofa in the family room is still the most comfortable place in the house, even if it was the first piece of furniture you bought for your first home. When you paid $500 for that sofa 10 years ago, it was a pretty large investment. But nowadays, you can’t get a sofa of that same quality for less than two or three times your original investment. What would happen if you lost that sofa in a fire? With a basic homeowner’s policy, furniture is only insured for its actual cash value: its replacement cost at the time of the loss minus a depreciation of its value and any deductible applying to your policy. So you’d probably be lucky to get $50 to $100 for the old, worn-out sofa not even close to the price for a new one now.
But with a replacement cost coverage endorsement, you’d be paid for the lost item at today’s cost or what it would reasonably cost to replace the sofa with one of equal value, after you satisfy the deductible. No worries about depreciation or inflation affecting your reimbursements’ you’ll receive credit as if you bought the sofa yesterday.

And for the most complete protection of your home itself, make sure you’ve insured your residence to at least 80 percent of the actual cost of rebuilding it. If your home is insured for less than 80 percent, any losses won’t be paid in full.

Replacement cost coverage is typically available for a small additional charge to your homeowner’s policy. You and your agent can work together to calculate what the replacement cost would be for your home and possessions, and to make sure you have protection sufficient for your needs.

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2. Do you know if you have enough homeowners insurance?

You’ve finally done it you’ve signed an agreement to buy your dream home. But now you need some homeowners insurance. So, how much should you buy?

For your most complete protection, your coverage must equal at least 80 percent of the actual cost of rebuilding your home. Even closer to the replacement cost (90 percent or more) is better. Unfortunately, some homeowners opt for saving money by insuring their residence for far less than its replacement value. While a total loss is unlikely, these homeowners are gambling more than they know. Unless a home is insured for at least 80 percent of its replacement value, the policyholder may be in for a rude surprise, particularly in the case of a partial loss. That’s because partial losses on underinsured homes are not paid in full. If you insure your home to less than 80 percent of its replacement value you will only be paid a portion of your loss, based on the amount of coverage you have.

Replacement cost coverage is not only a good idea for your home, but for your personal belongings as well. With a replacement cost endorsement, you will be reimbursed for the actual cost of any lost items, minus your deductible.

As always, your best bet is to discuss your homeowners insurance with your Fridrich Pinson & Associates Representative. We can help you make sure you’re insuring your home for an amount that will result in a full insurance settlement.

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3. What you can do to reduce your homeowner’s insurance?

Think your homeowner’s insurance premium is too high? Other than moving, what can you do? Here are some practical ideas for reducing your insurance costs: Increase your deductible. The higher the deductible, the lower the premium on your policy. Just make sure you choose a deductible that you can afford if you suffer a loss.

Use one company. Many insurance companies offer discounts if they insure your home and your cars.

Install smoke detectors and burglar alarms. This type of equipment naturally protects you and your family, and some companies offer discounts depending upon the type and sophistication of the equipment.

Stop smoking. Some insurance companies offer discounts if no one in your family smokes.

Stay with your current insurance company. If you’ve maintained coverage with a company for a number of years, you may be given a discount for your loyalty.

Practice safety. You could be in line for a discount if you haven’t had any losses for a certain number of years.

Contact your Fridrich Pinson & Associates Representative for more ideas on ways to reduce your homeowner’s
insurance premium.

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4. If you rent, do you need insurance?

If you rent a home, townhouse or apartment, your possessions are just as precious to you as any homeowner’s. They deserve protection against fire, theft and other common perils. Fortunately for renters, this protection can be surprisingly inexpensive.

First question: Do you really need to insure your belongings? You can answer that in 10 minutes by adding up the approximate value of your major personal possessions—your furniture, drapes, carpeting, TV and other appliances, clothing (don’t forget all those shoes!), sports equipment, cameras, tapes and books, jewelry, and whatever else you own and cherish.

Second question: If a devastating loss occurs, can you afford to replace all your possessions at today’s prices?

If the answer is no, your next move is clear. For a few extra dollars a month, you can buy replacement cost coverage (with a small deductible) for your personal belongings. Then, if you suffer a loss, you will be paid what it costs to replace your valuables at today’s prices without regard to depreciation or wear and tear.
Your belongings will be covered against fire and theft and other perils, even while they’re in a moving van. Some policies compensate you for temporary living expenses if fire or smoke drives you out of your rental unit.
Renters’ policies also provide important liability protection – a financial lifesaver if you are held liable for injury to another person or another’s property. This peace-of-mind coverage accompanies you wherever you are in and around your apartment or rental home, walking down the street, at a party, on the golf course, or on vacation anywhere in the world.

Warning: Don’t rely on your landlord’s insurance to cover your belongings. Unless you rent quarters from a close relative and live under the same roof, your landlord’s insurance can’t help you. Be a smart renter. Ask your Fridrich Pinson & Associates Representative about renters insurance and how it can protect your belongings.

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5. Why is it important to prepare a household inventory?

Without looking, do you know how many pairs of shoes you own, when you bought them and how much they cost? Or, how many DVD’s or CD’s you own? That may seem pretty trivial, but if you lost some or all of your personal belongings in a fire, burglary or other disaster, would you be able to provide a list of everything that was missing? Probably not. That’s where a household inventory can help.
A household inventory can provide you with a record of your household furnishings and belongings, when you purchased them and their original cost. Putting together an inventory involves just three basics steps:

1) List all of your belongings, room by room. Record the serial numbers, purchase dates, purchase prices and estimated current value. If you have them, attach your receipts. Keeping receipts, canceled checks and appraisals can help you to prove ownership and value of expensive items such as stereo equipment, furniture, cameras, appliances and jewelry.

2) Take photographs of your possessions to back up your written inventory. Take pictures of each wall of every room, with closet or cabinet doors open. On the back of each picture, write the date, contents shown and location. You may also want to videotape the contents of your home. Do a commentary on your belongings as you go from room to room.

3) Store the inventory, photos and videotape in a safe place away from home. An obvious choice is a safe-deposit box at a bank. You may also want to keep a copy of your inventory at home so you can revise it from time to time at least every other year. And, don’t forget to update your inventory to include new purchases!
Contact your Fridrich Pinson & Associates Representative if you have any questions.

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6. How to keep burglars out of your home.

You don’t have to be a crime expert to protect your home from burglars. You don’t have to spend a lot of money, either. You can make sure burglars don’t find “easy pickings” at your house by taking some, or all, of these steps:

  1. Keep your house locked, even when you’re in it! Windows too! If you move to a new home, change the locks.
  2. Never hide a key under the doormat, over the door or anyplace else. Instead, leave a key with a trusted neighbor.
  3. Be alert for suspicious characters in your neighborhood. If you’re not sure, call the police anyway.
  4. Don’t put your name on your mailbox.
  5. Avoid giving information to unidentified telephone callers.
  6. Don’t use an answering machine to proclaim your absence. Leave a message that you’re busy and will return the call soon.
  7. Make a complete inventory of all your possessions. Take photos, record purchase prices and dates, and jot down serial numbers of appliances. Store the completed inventory in your safe-deposit box. The better your inventory, the better your chances of recovering stolen items and receiving a full and prompt settlement from your insurance company.
  8. Mark your valuables permanently with an engraving tool. (Ask the police for information.)
  9. Place a warning sticker in your window to discourage burglars.

If you’re victimized, report your loss, however small, to the police. If you don’t, the police won’t be able to solve the crime or recover stolen items.
Support a “Town Watch” program in your community.
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7. Why you may need special coverage for your boat,
wave runner and other watercraft.

Planning to buy a boat, wave runner or other off-road vehicle and wondering what protection your homeowners policy offers? Your best bet is to check with your Fridrich Pinson & Associates Representative for detailed information pertaining to your situation, but here are a few things to consider:

Does it need “tags?” If your snowmobile, dirt bike or, yes, garden tractor is subject to motor vehicle registration, it’s not covered for damage under your basic homeowners policy. You’ll need a special coverage policy.

Where are you using it? Where you use the vehicle is a key factor in determining whether or not you have liability coverage under your homeowners policy. For example, if you’re using your own golf cart on the course, you’re covered, but not if you take it out on the nearby interstate. Similarly, you have liability protection for a four wheeler you use on your premises, but not beyond your property lines.

How big is your boat and where do you keep it? Your homeowners policy provides limited coverage (usually up to $1,000) for damage to a watercraft you own and keep at home. Also, damage from wind or hail is only covered while it is in an enclosed area, such as a garage. Certainly, if you own a mid- or large-size watercraft and keep it docked off premises, this is not sufficient coverage. Further, once your craft “hits the water,” your have no liability coverage for injury or damage you cause.

Renting vehicles is a whole different story. Your liability coverage related to operating recreational vehicles is actually greater when the vehicle is not yours. For instance, if you’re on vacation and you rent a wave runner, ATV or moped, you have liability coverage no matter where you go. If you borrow a friend’s snowmobile (with permission of course), the same holds true.

Bottom line: If you own these types of vehicles, call your Fridrich Pinson & Associates Representative, discuss your situation in detail, and work together to assure you’re fully protected for property damage and, more importantly, your personal liability.

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