Homeowners insurance protects your investment

This was originally published on Monday, May 6, 2013, in the Pacific Daily News.  Click here to subscribe to the PDN.

 Question: I am in the process of buying a house. What disaster planning should I be thinking about?

Answer: As you go through the process of buying a home, you’ll realize the responsibility that comes with home ownership. Many of those responsibilities may have been taken on by the renter or landlord of your last home.

Your first step to being prepared for a disaster should be to start researching homeowners insurance policies.

A homeowners insurance policy protects you and your home. Your policy can cover you from man-made and natural disasters, theft, bodily harm of others while on your property, and so much more. You can also specifically insure the contents of your home as most homeownership policies don’t cover those specific items. Shopping around for a policy can be quite confusing and should not be taken lightly. Insurance policies can be long and confusing but it will benefit you to understand what coverage you need.

Find an insurer

Talk to co-workers, friends, and family members about what insurance company they use. The types of policies and coverage vary from company to company.

Call several different companies and set up an appointment to get quotes. Have an idea of what type of coverage you want before visiting.

Get three to four quotes from different companies to find which one will fit in your budget and provide you with the best coverage.

Many insurance companies offer discounts if you sign up for a bundled package of home, car, and life insurance.

Your home

Take a look around your home. Are there safety measures that you use to protect your home? Typhoon shutters are a great way to protect your home during typhoons.

Are there fire extinguishers or alarms strategically placed throughout the house? Do you have a security system to deter theft?

Make a list of these security items and bring it along with you when you shop for quotes or provide this information to your broker. These safety measures can lower the cost of your premiums. Ask the agent what other safety measures you can use to further bring down your costs and protect your home.

In Guam, earthquake damages are but flood damages aren’t typically not covered by a standard homeowners policy.

If you are located near the ocean, a river or in a low lying area you may be at a high risk for floods. You may have to pay for a flood insurance policy. Your home’s location can determine how much you pay or if you need extra coverage. When shopping for an insurance policy, discuss your home’s location to get an accurate quote.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and with financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

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