Does your homeowner’s insurance policy include comprehensive perils? Do you know what that means? Nearly every insurance policy has exclusions (perils that the policy excludes against). The exclusions can include earthquakes, flooding, and sump pump failure.
The short video below will help you with your understanding of what your homeowners insurance policy may or may not cover.
As always consult with your agent if you have specific questions about your homeowners insurance
Greeting the New Year is one of my favorite events. 
It’s a time when I can reflect back at what has transpired over the past 12 months, and set goals and plans for what I hope to accomplish over the year. It’s a time when I can free myself of the past year’s failures and shortcomings, while I celebrate my accomplishments and prepare to be my best in the New Year.
Some people will resolve to lose weight or quit smoking in the New Year. I would imagine that a lot will sit down at the kitchen table with pen and paper in hand to do some financial goal planning. You’re planning to pay off that pesky credit card, or maybe you’re planning on putting in that swimming pool that you’ve always wanted.
With this in mind, let me suggest that the New Year is also an excellent time to review all of your insurance needs with your insurance agent. Insurance is not a “set it and forget it” financial product. It’s a financial product that needs to be continually maintained. As our lives change so do our insurance needs.
As you probably know, there are many changes 
taking place in insurance right now, and not just in health insurance, but also in home and auto. Premium rates are increasing and coverages are decreasing. You’ve probably noticed the increasing premiums, but did you know that your coverages may not be as good as they once were?
I thought that I was covered is not an insurance program. Make an annual insurance review part of your new year’s financial strategy. You will be glad that you did.
Do you have Replacement Value or Actual Cash Value? This is an important question that needs to asked when determining which insurance program is right for you.
Replacement Value Insurance means that if your covered item is destroyed you will be paid the amount of money it takes to replace that item with a brand new item. There are a few caveats in each policy and you must subtract your deductible, but this is a good definition of Replacement Value.
Actual Cash Value Insurance (ACV) means that if your covered item is destroyed you will be paid the value of that item at the time of the occurrence. If your item is 10 years old the item will be depreciated accordingly and you will be paid the cash value of that item minus your deductible.
Here are two examples.
Your roof blows off of your house in a bad storm. You get an estimate of $15,000 to replace your roof.
If you have Replacement Value Insurance with a $1,000 deductible the insurance company would pay the roofing contractor $14,000 and you would pay $1,000, the amount of your deductible.
If you have ACV with a $1,000 deductible the insurance company would then do some calculations to determine the value of your roof at the time of the occurrence. If your roof is 8 years old, they would depreciate the value of your roof by 8 years. They may determine that the cash value of your roof to be $11,000. The insurance company would then pay the roofing contractor $10,000 ($11,000 minus your deductible of $1,000), and you would pay the roofing contractor the remaining $5,000.
Here’s another example
In that same scenario of the roof blowing off of your home, you have nearly all of your personal property damaged by rain water, hail damage, and wind.
If you have Replacement Value Insurance on your personal property the insurance company would calculate how much it would cost to replace the damaged personal property with new personal property of the same kind. If they determine that it is $100,000, you would be paid out that amount to replace your personal property. In this case the deductible was already paid through the roofing contractor.
If you have ACV on your personal property
the insurance company would then do some calculations to determine the cash value of your personal property at the time of the occurrence. You may only get $200 for your 10 year old couch, even though a new couch may cost $1,200. They may determine that your personal property had a cash value of $25,000 at the time of the occurrence. You would be paid out that amount to replace your personal property. Your deductible was already paid through the roofing contractor.
Summarizing these 2 example; if you had Replacement Value Insurance your insurance company would have paid out $114,000 (replacement of the roof and your personal property) and you would have had to pay out $1,000 (the amount of your deductible); and if you had ACV your insurance company would have paid out $35,000 (the ACV of the roof and your personal property minus your deductible) and you would have had to pay out $80,000 to replace your roof and personal property.
Replacement Value Insurance cost about 10% more than ACV and there are some situation where ACV is called for. Some risks may not be eligible for Replacement Value Insurance because of the condition of the property, or the nature of the risk.
There are changes taking place in the insurance industry right now that you need to be aware of. Some companies are changing the way that they pay out claims from what they may have done in the past. I am seeing deductibles increasing and policies that once had Replacement Value Insurance getting changed to ACV. Many HO3 polices have Replacement Value on the home but ACV on the personal property. Do you know what you have? 
If you are unsure, contact your agent right away.
You can also contact Bragg Insurance Agency at 317-758-5828 for a free no obligation review of any of your insurance policies.
What if the unthinkable happened to you? You were the cause of a major accident that caused death or serious injury. Would your insurance liability coverage be enough to cover the injured parties expenses, and protect your from financial ruin?
For the vast majority of people the answer is “No”, but the umbrella policy can help you change that.
The umbrella policy starts at $1,000,000 in liability coverage and it covers your excess liability over your auto and homeowners insurance limits.
This means that if you auto insurance liability limit is $250,000 per person; with the umbrella policy in place you will then have $1.25 Million in liability coverage. If your homeowner’s liability limit is $500,000; with the umbrella policy in place you will then have $1.5 Million in liability coverage.
Do you really need that much coverage?
If you are the cause of a serious accident you will suddenly be thrust into a “perfect storm” of financial ruin. The combination of high medical expenses, attorney’s fees, and a “sue happy” society could cost you’re your life’s savings, future earnings, and equity that you have built in your home.
How much does it cost?
Fortunately this type of coverage it is very affordable. It varies from person to person, but I typically see a premium range of $200 to $300 per year. $25 per month is not a lot of money to protect everything that you’ve worked for your whole life, especially in light of how much we spend for gas, cable TV, and dining out.
Who needs an Umbrella Policy?
As an agent it is vitally important that I get to know my clients as best as possible. This helps to recognize different risks associated with their occupation, hobbies, and life style.
I recommend this coverage to all of my clients, but I strongly recommend this coverage to people who have occupations that make them more susceptible to law suits, such as people who work with children. It is my opinion that every teacher, Sunday school teacher, bus driver, day care worker, and little league coach have the umbrella policy as part of their insurance portfolio.
I also strongly recommend this coverage to people that have money that they want to protect. Equity in homes, savings accounts, retirement accounts, future earnings, and other assets are all at risk when there is a serious accident.
For more information on the umbrella policy or to review your coverages, contact Bragg Insurance Agency.
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