Tuesday, August 14, 2012

Insurance Tips for Soon-To-Be Retirees

April 2, 2006 Tornado Outbreak, O'Fallon, Illi...
(Photo credit: Wikipedia)
Over the many years, you have probably paid your homeowners insurance just by routine. Today, experts with the AARP have begun to warn people that this routine continued without a lot of thought can be a huge financial mistake. All homeowners policies aren’t the same and not all companies charge the same costs and premiums. Retirees need to think about the fact that the coverage they bought many years ago may not be what they need today.

What Is Covered
Of course we all know that homeowners insurance is a type of coverage for homes in case some damage happens. The policy you bought many years ago on your home may have been complex or simple. The variations are going to be in what types of damage are covered. There is fire damage, theft, flood, and earthquake damage. Then you have the policy chose that offers a cash value, discounting the depreciation, or the one that offers complete replacement coverage with no depreciation taken out. Then, you have to take into consideration the value of what’s inside your home. For retirees, that may have changed a lot today from what you had years ago.

Retirement Needs Change
When we reach the age of retirement, our needs may change quite a bit. You may scale back on the items you have in your home. This is when you have to think about your homeowner’s policy and the need to ensure that what you have worked so hard over the years to accumulate. You want to be sure those assets are protected and covered. While so many retirees are focusing on their health insurance, they let their homeowner’s insurance slip through their minds.

Value of Home
Most retirees don’t even remember what was covered or not covered years ago when they took out their policies. Start to ask yourself some questions. Do you know what is covered and what’s excluded? Do you have coverage for being burglarized or for an act of God that could occur? Dig out your policy and start crunching some numbers. You have to think about what your home is worth now. Check out the values of homes in your neighborhood that sold recently and compare. Come up with a pretty good figure and ask your insurance agent to have an analysis done on what the cost would be if you had to rebuild your house.

Retirees Accumulate Stuff
Make a list of all the items in your home. It’s going to take a while but go one room at a time and account for everything. Some people like to use a camcorder to go through the house and record by voice what is in each room. Regular cameras can work as well. When you come across things that are very valuable, take a close up photo and write a description of the item with the date on the back. Be as specific as you can be and note the condition of your items as well. Model numbers or serial numbers should be written down as well as all your art, antiques and jewelry. Give your kids a copy of your information or put a copy in a safe deposit box. By now you should have a pretty good estimate of the value of items in your home. Remember as well that most homeowner’s insurance policies cover up to a specified amount of the home’s contents. You may need to look into a separate insurance policy for items of great value.

Always be sure to notify your insurance agent when you retire. They can assist retirees in determining any types of discounts they may be eligible for. Living on a fixed income may cause you to think about how to cut down on items and insurance can be one of them. Keeping your home safe with burglar alarms and smoke detectors can reduce rates as well. Think about everything when you are retiring and don’t forget about your homeowner’s. You can probably save a lot of money and protect your assets as well.

Kelly Clarion writes about finance, economics & homeowners insurance quotes.

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