It may not be the most exciting or glamorous topic, which explains why many homeowners today do not fully understand whether they are carrying the proper types of insurance on their homes. Insurance is designed to protect you against certain risks and hazards, which change over the course of time. Unfortunately, most homeowners feel that once their policy is in place, they’ve washed their hands of the situation, and never bother to review their coverage until it is too late.

There is a good chance you may not only be carrying inadequate coverage to protect you, but also needlessly carrying a policy or coverage you no longer need. The basics of purchasing insurance coverage for your home are based on insuring it to cover its replacement cost, should it become damaged by a hurricane, flood or other natural disaster. However, with the recent fluctuations in real estate market values and the costs associated with construction of a new home, you may be surprised to learn your current coverage is not aligned with your home’s present valuation. If left unchanged for a certain period of time, some insurance companies will automatically adjust your coverage limits to reflect only a slight increase for inflation. Also, some companies have been known to alter policies to eliminate unlimited payments for home replacement, and instead have capped those benefits at a certain level. Only by reviewing your current policy will you know if you are covered in the event of a disaster, catastrophic event or accident within the home.

There are some essential types of coverage you should have, and some others you may want to research to see if they may benefit you. Here are the basics:

• The structure itself – this is the main part of a policy designed to replace your home should it be deemed a total loss. But again, don’t buy your coverage based on what you paid for your home. Things change, and you need to make sure the dwelling itself is properly covered. If you have added a room or made other major alterations to your home, be sure your insurance has been updated.

• Your possessions – be sure you have an up-to-date inventory of all of your belongings, most importantly those with the most value. If your luxury vehicle is damaged while in your garage or driveway, will your homeowners policy cover the damages, or will you need to deal with your car insurer? It may be a good decision to take digital images of your most expensive items – jewelry, electronic equipment, furs, furniture – to better help with determining the value they hold should they ever need to be replaced.

• Living expenses – if something happens to your home, does your coverage provide for a temporary place for you and your family to live, and cover any day-to-day living expenses?

• Liability coverage – if an accident occurs in your home or on your property, you may not have enough coverage to protect you against a liability lawsuit. Although most policies carry liability coverage of $100,000, a lawsuit against you for a serious accident that happened to someone while in your home may ask for damages exceeding that amount. Shop around to see how much additional coverage may cost, and ask your agent to assess your risk and advise if he or she thinks it is worth the additional premium.

• Specialty insurance – in Florida, flood and hurricane insurance are not typically part of your homeowners policy. Be sure you have appropriate coverage for natural disasters and Acts of God that may not be in your existing policy.

• Umbrella coverage – an umbrella insurance policy can be a good way to ensure you are completely covered for losses that may not be covered under your standard homeowners policy. Once thought to be something needed only by the rich, umbrella policies can provide peace of mind if your dog bites someone in your home, and you are sued for an amount greater than that of your homeowners policy liability limits. Some umbrella policies will even cover legal fees and costs associated with defending your legal rights should you be sued for an accident on your property.

Home-Based Business: How Do I Protect Myself?

If you operate a business out of your home, the need for adequate insurance becomes even more important, and the types of coverage and liability limits can vary greatly. Even though you may feel you do not need the same extensive coverage as a business operating out of a downtown storefront, you may be surprised at the levels of exposure you are subject to if you operate a business from your home. Some of the factors to consider include:

• Business machines and equipment – these items may not be covered under your homeowners policy.

• Product – if you make a product from your home-based business, this type of coverage will protect you in the event someone is hurt while using your product.

• Cash flow and operations – if your home-based business is interrupted because of a loss or damages within your home, you may need this type of coverage to recover your loss of income.

• Customers – your homeowners policy may not cover an injury that occurs to someone in your home if that person came there to see you in a business capacity.

• Owners and key people – if you have a partner who is unable to work with you because of an injury at your home based business, this form of insurance may provide assistance during the interim. 

Attorney Raymond L. Racila, a founding partner of the Goldberg, Racila, D’Alessandro & Noone law firm in Fort Myers, spent 15 years as an insurance adjuster prior to embarking on his two-decade career as a personal injury lawyer. “Inadequate insurance coverage can expose you to a huge variety of liability issues when it comes to your home,” says Racila. “I counsel people to review their homeowners policy annually, and be vigilant when it comes to ensuring they are properly protected in the event of an accident or other disaster in their home or on their property.”

The attorneys of Goldberg, Racila, D’Alessandro & Noone are experts in resolving disputes with insurance providers, and in helping you limit your risk of being sued for damages that may occur on the premises of your personal residence. To learn more, contact us at 239-461-5508, or visit our website at www.goldberg-law.com.