![]() Overlay your homeowners coverage with an umbrella policy providing at least another $1 million of liability protection. To increase the standard limit of $300,000 to $500,000 would cost about $20 annually, says Rupp. Given that medical (and legal) expenses can quickly mount, Rupp urges clients to buy as much liability coverage as they can afford. You'll need liability coverage in case you (or a family member) are legally responsible for causing injury to someone else at home or elsewhere. If your insurance company offers a fixed dollar amount with no time limit, divide that amount by 24 months to compare the coverage with that of other policies. ![]() Rebuilding almost always takes longer than you anticipate, so look for a policy that provides 24 months of coverage for comparable housing and related expenses (called loss of use coverage). Fireman's Fund even offers a "collections" endorsement that would cover the contents of a wine cellar. Such coverage typically costs $17 per $1,000 of property value annually. Get appraisals of valuables and, if necessary, purchase a personal-articles floater to cover them beyond the normal limits of your policy. ![]() The Colleys have asked family members for holiday photographs taken in their home that show heirloom antiques in the background. Not only will the images jog your memory, they will also assure insurance adjusters that your furniture really was high-end or antique, and not just starter stuff from Ikea. Open cupboards, closets, drawers and storage boxes and shoot those, too. You can create a detailed listing or just take photos or make a video (see Kiplinger's Recipes for Quick & Easy Financial Fixes). "Think about having to imagine yourself in every room of your home, trying to remember everything in it," says Doug. Before the fire at their home, the Colleys had begun an inventory but hadn't finished it - and it went up in smoke, too. In the event of a total loss, you usually have 180 days to provide your insurer with a list of everything you owned, from sofas to soup spoons. It will cost about $50 to $75 a year to double your protection to 20% of the dwelling limit. You can beef up your coverage by buying an endorsement - often called a building-code upgrade. Some insurers include full building-code coverage, but most include either an extra 10% of the dwelling limit or a flat $25,000, which may also have to go toward removal of debris. After a disaster, municipalities may quickly tighten their codes. New building codes often create a discrepancy between the limits of coverage and the actual cost to rebuild, says Kathleen Stalter, risk-services manager at Fireman's Fund. Your policy probably already has 25% extra coverage built in, but you can buy more in 25% increments - usually for $30 a year - up to another 100%, says Michelle Rupp, an independent agent in Seattle. That's one reason it's also smart to purchase extended-replacement coverage, which covers the difference if the price to rebuild exceeds your dwelling limit. Building costs can change not only with the economy but also after a disaster, when contractors and materials may be in short supply, says Don Soss, a vice-president of Fireman's Fund. Your policy should include an inflation guard that is keyed to regional costs and, ideally, adjusts your coverage every year. Keep in mind that you're not insuring the market value of your land, just the cost to rebuild your home, garage and any other buildings.
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