3 ways to protect your home from unexpected events

Key Points

  • Whether buying or renewing, make sure you have the right homeowners insurance in place for your situation.
  • Keep an up-to-date inventory of all your possessions.
  • Simple improvements to your home can go a long way in protect it.

Your home is one of your largest assets. It's important to protect it from unexpected events – including severe weather.

Even if you’ve got nothing but sunny skies in your area, severe weather throughout the country can have an impact on your finances. In 2015, there were 10 weather and climate disaster events with losses exceeding $1 billion each across the United States.1 These events put a strain on insurance companies, which can lead to higher insurance premiums for everyone over time.

These tips for homeowners can help you protect your home while increasing your severe weather preparedness.

Choose insurance carefully

When you’re buying or renewing homeowners insurance, you need to understand exactly what your policy will cover in the event of severe weather.

Umbrella coverage

Here are two important questions to ask your agent or advisor:

Do I have full replacement coverage?
This allows for you to rebuild your house and/or replace the items in it based on today’s prices. Other policies cover only the actual cash value or market value of your home and possessions, which can be considerably lower than what it actually costs to buy new items.

Do I need umbrella coverage?
An umbrella policy can help protect you if you’re involved in an incident where you’re determined to be at fault. Whether it’s a car wreck or an accident on your property, you could be sued and face expenses above and beyond what’s typically covered by your homeowners and auto policies. Consider this example: Say you’re involved in a car accident and sued for $1 million in damages. If your car insurance only covers $300,000 in medical expenses, you could find yourself on the hook for the remaining $700,000. However, if you have an umbrella policy, it could cover this balance — protecting your future wages from garnishment — and even pay your legal expenses and any income you lost while in court.

Keep excellent records

Put your insurance company’s phone number, your policy number, a digital camera and extra batteries in a fire- and waterproof safe somewhere in your home that is easy to access. “Post-event, you’ll need to document all the damage,” says Howard Mills, chief advisor to the insurance group at Deloitte and former superintendent of insurance for the state of New York. “You’ll need the digital camera so you can take photos of everything as soon as possible.” Also, remember to keep all your receipts for water, food and clothes that you buy after a disaster. Those are all insurable costs, as well.

You also need a complete and up-to-date inventory of all your possessions. Videotape every room, and make a list of all your possessions. Store this information outside your home, either digitally or in a safe deposit box, suggests Mills. “Once your home is gone, it’s impossible to rebuild from memory what you had. A good inventory will make the process of recouping what you lost much easier.”

Make small improvements that can make a big difference

Simple home improvements can go a long way toward protecting your home, saving money on your insurance premiums and improving your disaster preparedness. If you live in a coastal area, you may want to consider hurricane-proof shutters and garage doors. Roof wind clips, designed for high-wind areas, can help, too. If you live in the West where wildfires are an issue, flame-retardant shingles are a must. Routinely cutting brush and removing dead limbs and debris from the yard also help. Everyone may want to consider wind-resistant shingles when replacing a roof and impact-resistant glass when replacing sliding glass doors and windows.

Talk with an advisor to make sure you have the right coverage in place to protect one of your biggest assets — your home.