How to pick the right homeowners insurance

(BPT) - If you're like many Americans, your home may be your most valuable asset. That's why it's so important to protect it with homeowners insurance. Plus, it's probably a requirement of your mortgage. Setting up your coverage the right way starts with understanding the major parts of a homeowners policy.

Consider the following information and tips from the USAA Home Learning Center:

Dwelling protection

This protection covers the cost of repairing or rebuilding your home if it's damaged or destroyed. When you select the amount, keep in mind the cost to rebuild your home is different from its market value.

It's important to get the dwelling coverage right and to monitor it over time to make sure it keeps up with construction costs to rebuild. Under most homeowners policies, if you file a claim and have underinsured your home, your payout may be reduced.

Some insurers will help you estimate the rebuilding cost. They take into account the features, materials and finishes that make your home unique.

Personal property protection

This protection covers your furniture, clothing and pretty much everything else inside your home. Most policies set the amount of personal property protection as a percentage of the dwelling coverage.

It may not be enough, though. Homeowners plans set limits on certain high-value items. If you own expensive jewelry, art, guns, stamps, furs, cameras, computers, silver or collectibles, you'll want to consider buying valuable personal property insurance. This is sometimes called a "personal articles floater."

When you set up your homeowners policy, you may have to make an important choice about how to reimburse losses. There are two approaches:

• Replacement cost. This coverage is the amount needed to replace the property with a comparable, new item.
• Actual cash value. This coverage considers depreciation in the value of your property. If your 10-year-old couch is destroyed, you'd receive what it was worth at the time of loss, not the money you'd need to buy a new one.

To make your recovery from a loss as smooth as possible, replacement cost coverage is recommended.

Liability coverage

This is one of the most important and least appreciated forms of protection offered through homeowners coverage. It protects you if you're found to be at fault for someone's injury or property damage. It even covers you for non-automobile incidents away from your home. Generally, it also covers your legal costs associated with such claims against you.

As a rule, your liability coverage should at least be equal to the total value of your assets for both your homeowners and auto insurance. If your assets are higher than the maximum coverage allowed under the policy, consider purchasing umbrella insurance to cover the difference. This is important to protect the savings and other assets you've worked hard to acquire.

Deductibles

As with other types of insurance, a deductible is the part of a loss that you're responsible for covering out of your own pocket. The higher your deductible, the lower your monthly premium.

Choosing a higher deductible can save you money with a lower monthly premium but increases the risk you take. Consider the amount of cash you typically have on hand in your emergency fund or checking and savings accounts. Make sure you can cover the deductible amount comfortably.

What may not be covered

Your policy's basic coverage won't cover some special risks.

• Floods: While a standard policy covers most weather-related events, floods aren't one of them. Flood insurance is inexpensive and the federal government offers it through insurers. While it's mandatory when you have a mortgage and live in a flood zone, you should give it strong consideration no matter where you live. Whether it's a flash flood or a few inches of excess water, flooding can cause massive damage to your dwelling and its contents.
• Earthquakes: You can add coverage for earth movements to your policy with an extra premium. If you live in an area prone to earthquakes, consider reinforcing your home protection with this coverage.
• Home businesses: Homeowners plans provide limited coverage for business equipment. If you run your business from home or have expensive office equipment, you may need to consider additional coverage. Your homeowners policy may not cover injuries to someone if they're related to your business.

For additional information on protecting your home, visit USAA.com/Homeowners.

Help Safeguard Your Family’s Finances

(Family Features) Every year, millions of American workers enroll in employee benefits through their workplaces during a period known as annual enrollment. It's usually a short window of time, but employees make crucial financial decisions for their families for the coming year.

In addition to medical insurance, many employers offer a range of voluntary benefits - those you select and pay for yourself, often by having the cost deducted directly from your paycheck. These voluntary benefits can help bridge the gap between what health insurance covers and what you're financially responsible for, especially as more employees opt for high-deductible health insurance plans.

In fact, according to a poll of 1,512 full-time U.S. workers conducted by employee benefits company Unum, 49% of working adults plan on enrolling in a high-deductible health plan for the coming benefit year, with Millennials (58%) and Gen Z'ers (54%) at even higher rates.

"While high-deductible health plans offer lower monthly payments, that can mean more financial responsibility for policyholders when they need to use the benefit," said personal finance expert Laura Adams. "Combining a high-deductible health plan with a health savings account can offset out-of-pocket costs, but it's also a good idea to consider voluntary benefits like disability, accident and hospital insurance to further financially protect your family."

If an accident, illness or injury prevents you from working, disability insurance replaces a portion of your income. While it may seem unlikely to many they would ever experience a disability, it's more common than some realize. Based on 2019 information from the Social Security Administration, more than 1 in 4 of today's 20-year-olds will become disabled before reaching age 67.

Accident and hospital insurance can pay a lump sum directly to you to offset out-of-pocket costs associated with medical care often not covered by health insurance.

• Accident insurance can provide financial benefits for urgent care and emergency room visits, ambulance and other transportation to the hospital, initial care and surgery, hospital stays and lodging expenses related to an accident and even follow-up care such as doctor's visits and physical therapy.
   
• Hospital insurance can pay a benefit directly to you when you are admitted to the hospital. This could include immediate medical costs and travel expenses or to help cover other bills.

Voluntary benefits, policies and details vary, so it's essential to review your options and discuss with your family before your benefits enrollment begins.

"Investing a little additional time on the front end can help reduce your family's financial risk down the road," Adams said.

For more information about employee benefits, visit Unum.com/benefits.

Photo courtesy of Getty Images

Planning for the Future

Taking inventory of your financial health

(Family Features) Only 28% of Americans are financially healthy, according to the U.S. Financial Health Pulse. Most others will have difficulty reaching long-term financial goals and are more vulnerable to the threat of financial shocks, such as car trouble, unforeseen medical bills or job loss.

Regardless of income or wealth, the road to financial health – how you are able to manage your day-to-day financial life while building for the future – can be a lifelong journey. What you do today can build toward or detract from your long-term resilience and ability to pursue opportunities. Whether you want to take that dream vacation, prepare for retirement or save for college, financial health takes effort to build.

“An overwhelming majority of the country is experiencing financial challenges that have lasting effects on people’s lives, on their ability to weather the inevitable ups and downs and on their chances to pursue their dreams,” said Jennifer Tescher, CEO of the Center for Financial Services Innovation (CFSI), the nation’s authority on consumer financial health. “Each year, CFSI and MetLife Foundation join forces on #FinHealthMatters Day to highlight the importance of financial health, especially for the 180 million people who are financially vulnerable.” 

These questions can serve as a starting point to take inventory of your financial health:

1. Are you spending less than you make? Regardless of your income level, it can be difficult to get ahead if you’re among the 47% of Americans that are spending more than or equal to what they earn, according to the U.S. Financial Health Pulse. The ability to manage cash flow directly affects your ability to build savings and deal with unexpected expenses.
    
2. Do you pay your bills on time and in full? Falling behind on bills, including credit card payments, can be a significant hindrance to improving your financial health. If all your bills seem to come due at the same time each month or don’t appropriately align with paydays, consider staggering bills based on their priority level with rent and utilities taking precedence over any less necessary items like cable television or subscription services, which could even be eliminated altogether. The ability to keep up with payments shows how well you’re able to manage cash flow and daily financial obligations.
    
3. Do you have sufficient liquid, short-term savings? The ability to draw on savings is important for coping with unexpected expenses such as car repairs or medical bills or a setback such as being laid off from a job. Having six or more months of living expenses in savings is considered financially healthy, but 45% of Americans don’t have enough savings to cover even three months, according to the U.S. Financial Health Pulse. Try setting aside 5-10% of your monthly income to build up both your emergency fund and long-term savings account.
    
4. Do you have appropriate insurance coverage? Along with sufficient liquid savings, having appropriate insurance can help you withstand an unexpected expense, such as the death of a loved one or a medical emergency. Shop around for the best rates and coverage on everything from homeowners and car insurance to life and disability policies.
    
5. Do you plan ahead for expenses? Planning ahead shows you are future-oriented and proactively managing your financial situation, a behavior that is strongly correlated with financial health. Proper future planning behaviors include using a budget, coding expenses, setting up automatic savings transfers and using financial management apps, among other habits.

 
For more tips to focus on your future financial health, follow #FinHealthMatters on social media or visitcfsinnovation.org/news/finhealthmattersday.

Photo courtesy of Getty Images

Save Your Way to Lower Home Insurance

(Family Features) If your homeowner insurance rates are creeping up even though you haven’t filed any claims, it may be time to take a look at how you can bring those prices back down.

Research, smart shopping and even some home upgrades can make a noticeable difference in your insurance premiums. Explore the cost-savings potential with these tips from the experts at CertainTeed, a leading manufacturer of exterior and interior building products:

Shop for the best rates. It’s easy to be complacent when you’ve used the same insurance company for years, but if getting the best rate is your objective, it’s a good idea to shop around. To do effective comparison shopping, have a copy of your current policy ready and contact a handful of competitors. Provide them the exact same coverage details so you can compare like rates, but also be ready to listen to information about additional coverage options that may suit your needs.

Combine homeowner insurance with other policies. Most insurance carriers offer multiple policy discounts, which they apply when you insure more than one item. For example, if your homeowner insurance carrier also insures your cars, you’re likely to save money on the rates for protecting both your home and automobiles.

Update your home’s first line of defense. Many homeowners focus on aesthetics when it’s time to make upgrades, but there are some important functional improvements that can make a difference when it comes to your insurance premiums. For example, as extreme weather becomes more commonplace, the first line of defense is often the type of roofing material chosen. Many insurance companies even offer discounts for using impact-resistant shingles. Check with your insurance provider before making a final selection, but in general, look for products that include “impact-resistant” in their name and specs, and “Class IV Impact Resistance,” the highest rating available for roofing materials.

For example, NorthGate Class IV impact-resistant shingles from CertainTeed are engineered to have a higher probability of resisting hail. These shingles are made using rubber-like polymers that offer flexibility and impact resistance, as well as crack and shrink resistance, even in cold weather. So when severe weather strikes, your home can be protected and stay looking good. 

Install a home security system. An intruder alarm can provide more than peace of mind. Insurance companies often reward homeowners who take steps to minimize the chances of burglary or vandalism. After all, a well-protected home is less likely to result in a claim for losses. Some companies offer varying degrees of discounts on insurance rates depending on the type of system you install, so be sure to thoroughly research the options. For example, a system that simply emits a loud noise when triggered may generate one level of discount, while a system that dispatches emergency personnel when activated can lead to an even better rate.

Insurance rates are one place to save money on your home costs. Learn more about impact-resistant shingles and how they can save your home and wallet at certainteed.com.