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Home insurance and severe weather risks

We are only a few months into 2012 and, all the way across the midWest and the plains states, thousands of homeowners are picking up the pieces after the latest surge of tornadoes brought destruction in major population centers. Indeed, the last two complete years have broken records for the severity of the weather conditions and the total of the claims paid out. If the doomsayers are correct and climate change is a reality, we can expect to see more extreme weather all year round. Most people pull their policies and check the wording to ensure they have cover for their homes. That's always the priority. To have a roof and four walls around you. Except there's a new survey showing that about 60% of all policyholders fail to go on to the next step which is to protect the possessions in the home by producing a file containing proper evidence of the extent of the contents. They see the headline in the policy which is usually a maximum amount claimable - keeping this simple, insurers tend to make this a fixed percentage of the rebuilding costs. If you want more than this rough average, you have to ask for additional cover. At this point, you realize the need for a proper home inventory.

The survey discovered that even when people do have a list of the more expensive items kept in the home, less than half have receipts and only about a quarter have photographic records. Even worse, only a tiny percentage of people keep a back-up copy of their records outside the home. So, sadly, if their home blows away, so goes all the evidence. In these days of computer power, it's not difficult to make a list and store it and pdfs of the receipts in the cloud. That way, whenever the insurance companies ask for copies - it's remarkable how often they lose what you give them - you can just send them another copy. With the list in digital form, it also easy to keep it up to date. That means canceling property lost or thrown away, and adding all the new property as it arrives in your home. The better the records you keep, the more likely it is you will get a reasonable fair value settlement. So, in an ideal world, you would have a description, serial numbers and bar codes whenever available, and some statement about the current state. Remember, unless you buy a Rolls Royce policy, this is a not a new-for-old plan. You only get the amount needed to replace like-for-like. This makes it essential to have some idea of whether the couch is as new or in dire need of replacement.

There are some nice packages and apps that list all the different types of possession you have have in the home. These lists are excellent in prompting you. It's far too easy to forget to record all the clothes, curtains, and workshop tools kept in the garage. Homeowners insurance cover is no use to you if all it pays is for rebuilding. An empty home is not a home. Put yourself in the right position to claim the full value of all the contents of your home. Make the home insurance policy work for you.

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