Keep your insurance up to date for 2008

By: BRADLEY J. FIKES - Staff Writer | Saturday, December 29, 2007 8:08 PM PST ∞

With the memories of the 2007 wildfires fresh in mind, keep this in mind for 2008: Whether they're for homeowners, renters or autos, insurance policies don't update themselves. These are not documents to sign, stash and forget.

Underinsured homeowners found that lesson especially bitter. It's essential to take stock of all your possessions periodically, notify your insurance company, and change your policy if need be. Here's what you need to know.

Homeowners' insurance
Practically mandatory for those owning a home, this insurance is a package policy, according to the Insurance Information Institute. It covers your home and the possessions listed on the policy. It also provides liability coverage for damage you, members of your family, or pets, cause to others.

Homeowners' insurance does not cover damage caused by poor maintenance, or by earthquakes and floods. The latter two require separate policies.

Just after the holidays is a good time to make a fresh inventory, according to the Insurance Information Network of California, a trade association. New and perhaps expensive items have entered the household as a result of gift-giving.

Free home inventory software for Windows and Mac is available from www.knowyourstuff.org. After you've updated your inventory, talk with your insurance company to see if you need more coverage.

However, Karen Reimus of Scripps Ranch advises policyholders not to take their insurance company's recommendation at face value. Reimus lost her home in the Cedar fire of 2003 and has since become an outspoken advocate for homeowners.

Reimus said her experience and that of those she's advised is that insurance companies tend to suggest a coverage amount that's insufficient in the event of a total loss. So it's up to the homeowners to do their own legwork to ensure that the insurance company's assumptions are correct.

Reimus recommended a low-cost online service called AccuCoverage, available at http://www.accucoverage.com. It uses a Web-based form to guide the homeowner through documenting possessions and their replacement cost.

She also suggests homeowners learn more from United Policyholders, at http://www.uphelp.org.

Steve Poizner, California's insurance commissioner, suggested in a recent interview with the North County Times that homeowners bear some of the blame for not getting enough insurance.

Insufficient insurance, Poizner said, "is bound to happen. People don't keep their insurance companies up-to-date."

Once a homeowner has informed the insurance company, then it's up to the insurance company to do the "right thing" and provide proper coverage, Poizner said. If the company doesn't, he said, "I'm going to hold the insurer responsible."

Poizner said people should shop around and compare rates from three insurance companies before making a choice. You can get a sense of what rates will likely be with a simple online survey. It's on the commissioner's Web site, http://tinyurl.com/2kjput.

The possible rates shown are from hypothetical examples designed to cover a wide range of scenarios, but actual premiums may vary.

Getting proper coverage hinges on accurately documenting the property at risk. United Policyholders suggests walking through the house with a videocamera, giving an audible narration describing the items shown. If you remember, say where and when you bought each item. Keep the receipts.

Other suggestions:

Find a reputable agent or broker who can advise you on how to properly insure your house. The advice of an agent representing only one company will differ from that of an independent agent representing multiple companies.

State outright that you are looking for full replacement coverage, and are concerned about not underinsuring your home.

Truthfully answer all questions.

Follow recommendations on increasing or maintaining your replacement limits.

Make sure you have enough coverage for the value of contents.

Renters' insurance
Optional, but highly desirable, renters' insurance can be bought from just about any insurance company that sells homeowners insurance. This is strictly for the contents of your dwelling. Landlords have their own insurance, but that is just for the building.

Add it up: television, DVDs, computers, furniture, appliances, jewelry, clothes and the total replacement cost can run into many thousands of dollars. The cost varies with the amount insured, whether you have safety features such as an alarm, but as a rule of thumb it runs in the neighborhood of $20 a month, insurers say.

Make an inventory just as you would if you were a homeowner.

Auto insurance
A disaster that destroys your residence could destroy other major property. For most people, their second most valuable property is their vehicle. So it's wise to check how your auto insurance policy holds up in event of a catastrophe.

California law mandates that drivers be able to pay $15,000 for injuring any one person in an accident, $30,000 for all injured in an accident, and $5,000 in property damage for any one accident. Most people meet that obligation by purchasing auto insurance.

Aside from meeting the legal minimum, how much auto insurance you buy is up to you, your lienholder, if any, and your insurance company.

The California Department of Insurance recommends policyholders shop around from several different companies, as auto insurance prices may vary greatly between companies. The department suggests you also talk with friends and relatives who've had to make claims, to see if they are happy about their treatment by the insurer.

Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com.

On the 'Net:

California Department of Insurance Consumer Hotline

800-927-HELP (4357)

File a complaint with the Department of Insurance

http://tinyurl.com/2l6a8n

Contractors State License Board

www.cslb.ca.gov

United Policyholders

www.unitedpolicyholders.org

Disaster Prepared

www.disasterprepared.net

Insurance Credit Scoring

www.insurancescored.com

Insurer Fraud

www.insurerfraud.com

Residential insurance companies and contacts:

http://tinyurl.com/3aydhh

First name only. Comments including last names, contact addresses, email addresses or phone numbers will be deleted. All comments are screened before they appear online, so please keep them brief. Comments reflect the views of those commenting and not necessarily those of the North County Times or its staff writers. Click here to view additional comment policies.