Homeowners: Don’t make these common insurance mistakes

Catastrophes, thefts, natural disasters, accidents, fires ā€“ they happen. If such misfortunes strike, a well-researched and up-to-date homeowner’s insurance policy can keep your family’s finances afloat during trying times. Proceeds from a homeowner’s policy can provide necessary funds to replace your house and belongings. A good policy can also protect against unexpected liabilities. If you’re considering a new homeowner’s policy (or already have one), watch out for some common pitfalls, including the following:

Inadequate policy limits. Some homeowners try to lower their premiums by purchasing a policy that doesn’t fund their home’s replacement value. That’s often a big mistake. If the cost to replace your home has risen over the years and policy limits haven’t kept pace, you could end up footing the bill for much of the replacement cost (or selling your property at fire sale prices).

Personal property not documented. If you need to file a claim, an insurance carrier will want solid evidence that you owned the items being claimed. It’s a good idea to take pictures or videos of all your household goods, and keep receipts of all expensive purchases. Place copies of the pictures and receipts in a safe deposit box and at home in a fireproof safe. You might even send copies to an out-of-town friend or relative. Being able to provide clear evidence of your personal belongings will simplify the claims process and help ensure that you get paid.

Valuables not covered. Check your policy to ensure that expensive jewelry, antiques, and other valuables are included. If not, consider adding a rider to the policy that specifically lists such items.

Deductible too low. Generally, the higher the deductible, the lower the premium. True, in the event a claim needs to be filed, you’ll pay a bigger chunk of the repair or replacement cost with a high deductible. On the other hand, with a high deductible you’ll generally pay lower premiums each year.

By doing careful research and avoiding some common mistakes, your homeowner’s insurance policy will be affordable and still provide solid protection should disaster strike.

About Brenda J. McGivern, CPA

Brenda McGivern started her own certified public accounting and management consulting firm in October 2001. The full service CPA firm provides tax and accounting solutions to meet the needs of today's small business and individual. Brenda McGivern has become a trusted advisor and valuable resource her clients rely on for timely, accurate assistance when they need it. Before starting the firm, she worked as an accountant for three years at a local firm and prior to that five years at a large international CPA firm in Boston. She has performed the following tax services: federal, state and local tax planning, international tax planning, estate and succession planning, mergers and acquisitions, capital retention and IRS representation. She has also coordinated assurance engagements, such as financial statement audits, reviews and compilations from the planning phase through the reporting phase. She has prepared and reviewed regulatory filings for numerous regulatory agencies including the Security and Exchange Commission. Prior to these positions she was selected from over 2,000 candidates into an eight-person intensive financial management program at an international technology company. The program consisted of graduate level classroom study and two six-month rotational assignments in financial operations. She graduated cum laude from the University of Massachusetts at Amherst and holds a Bachelors Degree in Business Administration with a concentration in accounting. McGivern also holds a license in Massachusetts as a Certified Public Accountant and is a member of the American Society of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She resides in Stoughton, Massachusetts with her husband Brian, and their sons Sean, Ryan and Conor and their dog, Davis.
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