Coldwell Banker News Series

COLDWELL BANKER® RECOMMENDS ENSURING AGAINST DISASTER WITH THE PROPER HOMEOWNERS INSURANCE

A News Series from Coldwell Banker Real Estate Corporation Highlighting Real Estate Tips

PARSIPPANY, N.J. (September 11, 2006) – Navigating all of the options available for homeowners insurance can be a daunting challenge at first. Yet, as "Mother Nature" reliably makes her appearances across the country year after year, selecting the proper insurance is absolutely critical to protect perhaps the largest purchase one will make over the course of a lifetime. It is a good idea to review your policy annually to ensure you have the best coverage for your geography and your possessions. To help, Coldwell Banker Real Estate Corporation offers the following primer on homeowners insurance.

The Fundamentals: The standard policies should reimburse for basic damages including burglary and destruction to the home caused by fire, smoke, lightning, ice, snow and frozen pipes. In addition, traditional policies often offer liability coverage for medical claims to third parties and legal damages should you be named the defendant in a lawsuit. The most common amount of liability coverage is $100,000.

Be Prepared for the Worst Case Scenario: It is likely that before agreeing provide you a loan, the lender required you to purchase at least a basic insurance plan. However, homeowners should be prepared for the worst, such as a disaster that could destroy the home. Find out exactly how much it would cost to restore the home from top to bottom, and then contemplate insuring it for that amount.

Although the policy will provide the funds to rebuild the structure, it still needs to be refurbished inside with all new appliances, furnishings, etc. There are two options for replacements: actual cash value and replacement cost. Actual cash value should provide reimbursement for the value of the item, minus depreciation for the length of ownership of the item. Replacement cost, which comes at a pricier premium, should provide reimbursement for the full value of the item at current pricing.

To best prepare for refurbishing the inside, put together a detailed home inventory of all of the items in your home you would want to replace in the event of a tragedy. Include everything, from jewelry to artwork to carpets to computer equipment to tools to sporting equipment, just to name a few. A list with receipts attached is ideal. Also consider doing a photographic or video inventory (date stamp the tape) in which the key information is narrated. Whether you compile a written or visual property catalogue, be sure to include: a description of the item and quantity, brand name, model or serial number, name of the vendor, date of purchase, purchase price, current value and replacement cost. Another tip, keep this documentation in a separate location in case tragedy should strike the home.

Water, Water, Everywhere? According to the National Flood Insurance Program (NFIP), flooding is the most common natural disaster in the U.S., yet it is typically not covered by traditional homeowners insurance policies. However, it is offered by the National Flood Insurance Program (NFIP) for many areas of the country and can be purchased through local agents. In fact, if a property lies in a flood hazard area (determined by the Director of the FEMA have a one percent chance of being hit by a flood in a given area), the borrower will likely be required to purchase flood insurance. If you live in an area prone to flooding, consider purchasing such a policy. It is not wise to rely on federal disaster funds, as these loans must be repaid to the government.

Sometimes floods are brought on by hurricanes. "Katrina" and "Rita" are stark reminders of this possibility and hurricane insurance has become pricier and more difficult to obtain. If you live in a hurricane prone area, shop around for the most comprehensive, and most affordable, policy you can find from a reputable provider.

About Coldwell Banker®
Since 1906, the Coldwell Banker® organization has been a premier full-service real estate provider. In 2008, Franchise Times magazine's prestigious Top 200 issue ranked the Coldwell Banker system No. 1 in real estate for the ninth straight year and 12th among franchisors in all industries. The Coldwell Banker System has approximately 3,500 residential real estate offices and approximately 100,000 sales associates in 47 countries and territories. The Coldwell Banker System is a leader in the industry in residential and commercial real estate, and in niche markets such as resort, new home and luxury property through its Coldwell Banker Previews International® division. It is a pioneer in consumer services with its Coldwell Banker Concierge ® Service Program and award-winning Web site, www.coldwellbanker.com. Coldwell Banker Real Estate LLC is a subsidiary of Realogy Corporation, a global provider of real estate and relocation services. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC. Each office is independently owned and operated.