By Donnita Fisher
Insure Storm Readiness
T
he National Oceanic and Atmospheric Administration logged 52 tornadoes, 508 hailstorms and 590 reports of high damaging winds in Texas in 2018. (The statistics for 2019 have not yet been released.) These weather events can happen any time of the year but occur most frequently in the late spring and early summer. The Center for Disease Control, the National Weather Service, and the American Red Cross offer advice about being prepared for storms. Most of this information involves assembling disaster kits, making escape plans and staying safe once storms hit. While physical safety is paramount, the assurance that your home could be rebuilt is important, too. We talked to several local agents about the kind of insurance needed and the procedures involved with making a claim. What kind of home insurance should most homeowners have? State Farm agent Adam Leggett: Replacement Cost with an All-Peril Policy Farmers agent Gene Ryan: A true replacement cost policy. Most companies will tell you that your coverage is based on replacement cost; however when you read the loss settlement clause you will find payouts are based on something other than true replacement; for example, "Fair Market Value" or "Actual Cash Value," which are not based on replacement cost. It is the biggest asset anyone will ever buy: Make sure it is covered correctly. Wylie Insurance Kylie Reising: You should have a homeowner’s policy that covers the dwelling, personal property and personal liability. This should be written on a full replacement cost basis. What about renters? KR: Even though you don’t own a home, you should have coverage for your personal property and personal liability. AL: Very inexpensive way to cover your personal belongings and to provide you with some liability on your residence. GR: Absolutely renters need to have insurance. If their assets/personal property were lost in a fire, would they be able to replace everything out of their own pocket? Often the renter may think “I don't have that 12 • The CONNECTION • April/May 2020
much,” and this very reason is why they should carry property protection. How much content insurance is enough? GR: Imagine you lost everything in a fire or tornado. What dollar amount would you need to replace your clothing, furniture, linens, plates, silverware, computers, toys ... etc. Most home policies express the dollar amount as percentages of coverage based on the dwelling amount. This may be enough, too little, or more than you need. You can build your home policy to your specific needs. Renters are a little different, but the question really boils down the same answer. What amount of coverage do you need to replace all your belongings – right down to your shoes and socks? What types of things are not covered by insurance? AL: That’s a very broad question. The two types of home policies are All Risk verses Named Peril. The most common named perils are: fire, lightning, explosion, riots, aircraft, smoke, vandalism, theft, falling objects, weight of ice, accidental discharge of water, but each policy is very different. Also – the reason that question is too broad is that there may be coverage, but the way something pays out might surprise or disappoint you to the point where you think there was no coverage. Who should have flood insurance? GR: Everyone, but that may not be realistic – definitely
