How financially prepared are you if a weather disaster strikes?

Last year was the fifth year in a row that 10 or more weather and climate disasters in the US logged at least $1 billion of associated losses. If you think 2020 threw everything it had at us and will now ease off, think again. While we all have our hands full with navigating the new realities of life under Covid19, nature is relentless and doesn’t slow down. Most Americans agree. According to a recent survey by American Institute of CPAs (AICPA), 61% or respondents said they were likely to be personally affected by a natural disaster in the next three to five years. Almost one in five said that prospect was highly likely. (see ThinkAdvisor: Few Americans financially prepared for a natural disaster: survey.)

Despite that, “… only 15% of respondents said they had created a disaster plan to protect their finances. Worse, 27% had not taken any steps at all to prepare for a natural disaster.” That’s rather daunting. Think about the problems and logistics in a hurricane, massive wildfire, or flood evacuation in the middle of a pandemic: public emergency resources are already strained. Plus, social distancing measures important to disease prevention will make things like finding emergency shelter and supplies even more challenging than normal at a time when many are suffering financial strain and economic strain from job loss.

AICPA has suggestions for financial emergency prep steps in their report on the survey:

Banking Without the Bank — If your bank branch is closed due to the pandemic, you may need some new options for accessing cash, depositing funds, and checking your account activity. Now is a good time to investigate alternative locations where you can use your ATM card to obtain cash without additional fees, and perhaps mobile banking which can allow most banking activities including check deposits and transfers between accounts.

Insurance Coverage — If you haven’t recently reviewed your coverage with your insurance agent, you’ll want to be sure your homeowner’s or renters insurance is up to date for changes in value, valuable items you’ve added like jewelry or watches, and special risks you may face like flooding. As a first step, be sure you know how to contact your agent, who may be working remotely or with a reduced staff under current conditions.

Safe Deposit Box — If you have documents in a safe deposit box that you may need after a disaster, you may find that your local bank branch is closed or operating under restrictions. You can check with the bank’s main office to learn how to access the box if local restrictions apply and may continue.

Wills, Powers of Attorney, and Health Care Proxies — If disaster results in incapacity, loss of a loved one, or serious injury, you’ll want to be sure that your legal paperwork is up to date. Your attorney may be working remotely under pandemic- related conditions. If your papers need an update, it pays to get a head start in contacting the professionals you will look to for help and advice.

Employment-Based Programs — Visiting your human resources department to check on items that may help you manage through financial survival in a disaster, like your disability coverage or ability to borrow from a 401(k) or similar retirement plan, is likely not an option if your workplace is closed due to the pandemic. You can take steps now to learn how to get the information you need, and request any needed updates, by phone or online.

AICPA offers more help at the 360 Degrees of Financial Literacy portal – see Disaster Action Plan: 5 Key Steps to Protect Your Family and Finances.

Other emergency prep planning tools:

 

 

 

Reprinted from Renaissance Alliance – no usage without permission.

Ideas for a safe and fun Fourth of July in New England

Things are looking much more positive and festive in New England for July 4 than they were a month ago for Memorial Day, but Covid19 is still looming so we all still need to be safe and careful. We worked hard to bring our numbers down, but we can see from some other parts of the country, things can spiral downward quickly if we don’t keep our guard up.

But you can still celebrate and enjoy the holiday. We’ve gathered some ideas and guidelines for how to have fun this Fourth of July!

The state of the states

Can you take day trips or weekend trips to adjoining New England states? See Northeast: Coronavirus-Related Restrictions By State for summaries, or we have state travel information below.

Virtual Holiday fun

If you plan to stick close to home, the New York Times offers some fun ways to mark the holiday virtually in Honor America’s Birthday (Safely) in 2020. 

  • They tell you how to enjoy televised NY fireworks, The Boston Pops and DC’s  “A Capital Fourth.”
  • They suggest several patriotic virtual tours such as The Statue of Liberty, Philadelphia’s Independence National Historical Park and other historic sites.
  • They offer a list of patriotic streaming movies, including a live recording of Hamilton on DisneyPlus.

The Washington Post also lists some holiday-related events, among them some real-world events in the capitol region and some televised and online events holiday events, such as July 4 at the National Archives, Wolf Trap Foundation for the Performing Arts concerts, and an online ‘We the People’ Concert and Tribute at Washington National Cathedral, along with other virtual concerts.

Walking, Biking, and Hiking New England

Outdoor activities are among the safest things we can do.  Fortunately, here in New England, we have beautiful scenery. Here are some suggestions:

Entertaining at home

Here are a few helpful guides:

We’ve also summarized some tips for both hosts and guest that were suggested by various guides and health experts

  • Check in with invited guests in advance about any concerns they have. Let them know “the rules’ so they feel comfortable and will respect your wishes. For example, rules about social distancing, what they should bring (their own beverages) or shouldn’t bring (shared food dishes, unannounced guests) and any bathroom rules, such as flushing with seat down.
  • Respect boundaries if people decline an invitation. Don’t take things personally.
  • Know your local guidelines about gathering sizes, but all experts agree: smaller is safer – and likely more comfortable for your guests.
  • Maintain social distancing – measure the space on your deck or your yard in advance to see how many seats can be accommodated 6 feet apart and base guest numbers on that.
  • Keep it outside. Have a plan to postpone if the weather turns bad and keep an eye on the weather.
  • Wear masks when not eating.
  • Wash hands frequently, bring / supply hand sanitizer.
  • BYO beverage, or provide them in individual cans or bottles.
  • Avoid shared plates, utensils, seasonings or condiments – things that people handle repeatedly.
  • Use disposable plates, utensils, napkins and place at each seat.
  • Avoid shared food dishes and plates. Provide individual servings.
  • Clean and disinfect high-touch areas like doorknobs and bathrooms before, during and after the party.
  • In bathrooms, provide paper towels, hand soap on the sink, disinfecting wipes.

 

Reprinted from Renaissance Alliance – no usage without permission.

Lightning Safety Awareness – Get the Facts

It’s National Lightning Safety Awareness Week. It’s good timing because July is the month with the most cloud-to-ground lightning strikes. According to the National Weather Service (NWS), four people have been killed by lightning so far this year. On average, 43 people died of lightning strikes each year over a 10-year period. Only about 10% of people who are struck by lightning are killed, leaving 90% with various degrees of disability. Your odds of being struck in a given year are about 1/1,222,000. Your odds of being struck in your lifetime if you live to be 80 are about 1/15,300.

From 2006 through 2019, 418 people were struck and killed by lightning in the United States.

  • 2/3 of the deaths occurred to people engaged in outdoor leisure activities
  • Males accounted for 79% of all fatalities
  • Fishermen accounted for four times as many fatalities as golfers
  • Beach activities and camping each accounted for about twice as many deaths as golf
  • Of work-related activities, farming was most dangerous
  • Texas, Oklahoma, Kansas, and Florida are the top four states with the highest recorded number of lightning strikes
  • Florida ranks first in lightning strike fatalities
  • 1/3 of all lightning related injuries occur indoors
  • Lightning can have a range of up to 10 miles from the thunderstorm. It’s important to go inside at first sign of an approaching storm and to say inside up to 30 minutes after a storm has passed

Did you know that there are five ways that lightning can strike you?

Check out lightning myths & facts

NWS offers these tips about what you need to know to stay safe outdoors:

  • NO PLACE outside is safe when thunderstorms are in the area!!
  • If you hear thunder, lightning is close enough to strike you.
  • When you hear thunder, immediately move to safe shelter: a substantial building with electricity or plumbing or an enclosed, metal-topped vehicle with windows up.
  • Stay in safe shelter at least 30 minutes after you hear the last sound of thunder.

Last Resort Outdoor Risk Reduction Tips – If you are caught outside with no safe shelter anywhere nearby the following actions may reduce your risk:

  • Immediately get off elevated areas such as hills, mountain ridges or peaks
  • Never lie flat on the ground
  • Never shelter under an isolated tree
  • Never use a cliff or rocky overhang for shelter
  • Immediately get out and away from ponds, lakes and other bodies of water
  • Stay away from objects that conduct electricity (barbed wire fences, power lines, windmills, etc.)

For many years, the advice was to assume a crouch position if caught outside, but NWS stopped recommending the crouch in 2008 because it simply doesn’t provide significant protection

Indoor Lightning Safety

Some victims were struck inside homes or buildings while they were using electrical equipment or corded phones. Others were in contact with plumbing, outside doors, or window frames. Avoid contact with these electrical conductors when a thunderstorm.

  • Stay off corded phones, computers and other electrical equipment that put you in direct contact with electricity.
  • Avoid plumbing, including sinks, baths and faucets.
  • Stay away from windows and doors, and stay off porches.
  • Do not lie on concrete floors, and do not lean against concrete walls.

The Electrical Safety Foundation International (ESFI) says that power surges caused by lightning can damage the electronics in your home. They offer this advice:

  • Lightning protection systems intercept lightning strikes and provide grounding path for dangerous electricity to discharge safely, leaving occupants and homes safe from harm
  • Panel box surge protective devices (SPDs) serve as the first line of defense against harmful home electrical surges, limiting voltages by diverting currents at the electrical service entrance. Only qualified electricians should install SPDs
  • Point of use surge protectors protect electronics plugged into the device from surges, must be replaced over time or after a major surge event
  • Power strips do not provide surge protection
  • No surge device can handle a direct lightning strike. Unplug sensitive electronics well before a storm to prevent damage

Additional resources

Reprinted from Renaissance Alliance – no usage without permission.

June is Men’s Health Month: Raising awareness about health checkups and screenings

Let the men in your life know how much they mean to you by encouraging them to get healthy! June is Men’s Health Month, a time to encourage and support all the men in our lives to get health screenings and checkups. Why? Quite simply, the founders of this initiative say that “men live sicker and die younger.” The dedicated month is sponsored by the Men’s Health Network (MHN), a national non-profit whose mission is to reach men, boys, and their families where they live, work, play, and pray with health awareness and disease prevention messages and tools, screening programs, educational materials, advocacy opportunities, and patient navigation.

MHN says that part of the reason men have a shorter life expectancy than women is that men are “more likely to go long periods of time without going to the doctor, they’re less likely to adopt preventive health measures, and are more likely to engage in risky behaviors.” Men’s Health Month aims to raise awareness and to shine a spotlight on the need for men to a more active approach to their health.

This MHN pamphlet Get It Checked offers a handy, printable schedule of checkups and age-appropriate  screenings for both men and women, Among other resources and initiatives, MHN sponsors the Men’s Health Resource Center, which offers multimedia and articles on such health topics as aging, cancers, cardiovascular health, diabetes, mental health, prostate health, sexual & reproductive health, and much more. They also offer information on fatherhood, behavioral health and nutrition.

Part of the reason MHN chose June as the dedicated awareness month is that it’s the month in which we all think about one of the most important men in our lives on Father’s Day. In addition to the month-long observance, they also sponsor Men’s Heath Week, which falls in the week prior to Father’s Day, and a Wear Blue Day, which this year falls on Friday the 19th.

If you’re a healthy man, spread the word.  If you are a woman, make sure you remind the men in your life to look after their health!

Men's Health Month infographic

Reprinted from Renaissance Alliance – no usage without permission.

Prepping for an active hurricane season in a pandemic

As if we all didn’t have enough on our plate this year – the National Oceanic and Atmospheric Administration (NOAA) is alerting us that we can expect an above-normal 2020 hurricane season, with 3 to 6 major hurricanes. The season runs from June 1 through November 30, so we have just dipped a toe in the water so far. CoreLogic’s annual Storm Surge Report estimates that yearly 7.4 million single and multi-family homes are at risk of storm surge – potential damage that could be intensified by the pandemic and the uncertain economy.

Emergency preparation for hurricanes is a vital priority every year, particularly for those who live in the southeast and in Atlantic coastal areas. This year, the pandemic poses additional planning challenges. NOAA says:

“Social distancing and other CDC guidance to keep you safe from COVID-19 may impact the disaster preparedness plan you had in place, including what is in your go-kit, evacuation routes, shelters and more. With tornado season at its peak, hurricane season around the corner, and flooding, earthquakes and wildfires a risk year-round, it is time to revise and adjust your emergency plan now,” said Carlos Castillo, acting deputy administrator for resilience at FEMA. “Natural disasters won’t wait, so I encourage you to keep COVID-19 in mind when revising or making your plan for you and your loved ones, and don’t forget your pets. An easy way to start is to download the FEMA app today.”

Vox offers a deeper dive on some of the challenges that a hurricane could pose: Imagine Hurricane Katrina during a pandemic. They note that response systems are already on overload and that evacuation and sheltering would have additional complications, suggesting that decisions about when to evacuate vs when to shelter in place may need to change:

Emergency evacuations are typically called for based on the expected impact of the hurricane, and may involve large populations moving to concentrated locations like emergency shelters or hotels — or leaving the area entirely. Even without a disease outbreak, evacuation decisions are always difficult, both practically and politically. The decision process should be altered during an epidemic because usual evacuation risks (traffic accidents, for example) will have to be balanced against the risk of increasing disease transmission, which could have longer-term effects than the hurricane itself.

The pandemic makes clearly communicating exactly who should evacuate even more important: Those in the storm surge zone should go while others should be encouraged to shelter in place and be prepared for wind, rain, and power outages.

Emergency prep is important up and down the coast, including in new England.  While hurricanes are a rarer occurrence in New England, the region still thinks back on the devastation of 1938, a hurricane which killed more than 700 people. Meteorologist Matthew Cappucci wrote a fascinating report of the great New England hurricane of 1938, which includes projections of damage that could occur today if the region were to experience a similar storm.

If you already have a disaster or a hurricane plan for your family or your business, update it to encompass the realities that the pandemic has imposed on your local area. It’s even more important than ever to have a checklist and to store supplies for up to a week. In addition, expand your time horizon – you may need additional time to execute any evacuations.

One preparation recommendation from nearly all safety officials: download the FEMA app and check your state or local emergency management authority for any available apps. Red Cross has a variety of excellent emergency prep apps.

We’re reprinting some tips about hurricane prep during a pandemic from the Houston Office of Emergency Management, and also include links for other prep tools and guides.

  • Understand that your planning may be different this year because of the need to protect yourself and others from COVID-19.
  • Give yourself more time than usual to prepare your emergency food, water, and medicine supplies. Home delivery is the safest choice for buying disaster supplies; however, that may not be an option for everyone. If in-person shopping is your only choice, take steps to protect your and others’ health when running essential errands.
  • Protect yourself and others when filling prescriptions by limiting in-person visits to the pharmacy. Sign up for mail order delivery or call in your prescription ahead of time and use drive-through windows or curbside pickup, if available.
  • Pay attention to local guidance about updated plans for evacuations and shelters, including potential shelters for your pets.
  • If you need to evacuate, prepare a “go kit” with personal items you cannot do without during an emergency. Include items that can help protect you and others from COVID-19, such as hand sanitizer, or bar or liquid soap if not available, and two cloth face coverings for each person. Face covers should not be used by children under the age of 2. They also should not be used by people having trouble breathing, or who are unconscious, incapacitated, or unable to remove the mask without assistance.
  • When you check on neighbors and friends, be sure to follow social distancing recommendations (staying at least 6 feet, about 2 arms’ length, from others) and other CDC recommendations to protect yourself and others.
  • If you need to go to a disaster shelter, follow CDC recommendations for staying safe and healthy in a public disaster shelter during the COVID-19 pandemic.

Additional hurricane prep tools

 

Reprinted from Renaissance Alliance – no usage without permission.

RMV license renewal extensions in New England

As you transition from lock-down to “real life” and take your car out of mothballs to put it back on the road, here’s an important question: did your license or registration inadvertently expire while you were watching Netflix? Is your vehicle inspection overdue? If you forgot to renew vehicle-related credentials or your credentials are about to expire, you may be relieved to know that many states have offered extensions. For example, the Massachusetts Registry of Motor Vehicles license renewal dates have been extended as follows:

  • Driver’s licenses and ID cards that expired or will expire in March, April, and May 2020, will now expire in September 2020.
  • Driver’s licenses and ID cards that will expire in June have been extended until October 2020.
  • Driver’s licenses and ID cards that will expire in July have been extended until November 2020.
  • Driver’s licenses and ID cards that will expire in August have been extended until December 2020.

Learn more about changes in procedures, office openings, and more at MA RMV – COVID-19 Information.

Here are links where you can find out how other New England states are handling vehicle related credentials:

  • Connecticut Department of Motor Vehicles issued a 180-day Credentials Extension for expiring DMV credentials. The extension includes all Connecticut driver’s licenses, learner’s permits, identity cards, emissions testing and registrations. The extension is effective immediately. See complete list at CT DMV.
  • New Hampshire Division of Motor Vehicles issued a series of bulletins, including  Options for Customers During Covid-19 Pandemic; New NH DMV License and Registration Extension Options; and NH DMV Extends Expiration Date of Previously Issued 20-Day Plates.  Stay up to date at NH DMV.
  • Rhode Island Division of Motor Vehicles – all road tests are cancelled through June 5.  Driver licenses, learner permits, IDs, CLPs, CDLs, registrations, inspection stickers, and disability placards scheduled to expire in the months of March, April, or May 2020 have been extended by 90 days. Find general information and updates at RI DMV
  • Maine Bureau of Motor Vehicles – On May 26, 2020 the Governor signed Executive Order 53-A, which means if a person can register normally through their municipality or Bureau of Motor Vehicle Office they must do so immediately. If your municipality is NOT accepting payments through Rapid Renewal, by mail, by telephone, or in the municipal office the notice of March 20, 2020 still stands. See Maine Bureau of Motor Vehicles for details and updates.
  • Vermont Department of Motor Vehicles – On May 8, the DMV issued a Continuity of Operations Plan for Alternative Services.  For more information, see VT DMV.

See our recent post: Get that idle car back on the road in tip-top shape

 

Reprinted from Renaissance Alliance – no usage without permission.

Beach lovers’ guide to Memorial Day in New England

The good news is that it’s Memorial Day Weekend, states are cautiously beginning to open beaches and parks, and the weather looks promising. The bad news is that the virus has not gone away so visiting your favorite coastal spots will come with many restrictions and limitations. If you are expecting a “normal” experience, you may be disappointed. You should “know before you go” and consider taking small steps to favorite outdoor activities rather than jumping in headlong … perhaps stay closer to home base to test the waters. Definitely don’t drive to another state without checking the status and availability of your destination, along with learning any rules and requirements that may be in place. Don’t count on lifeguards or public restrooms. Plan to bring face coverings, hand sanitizer, disinfecting wipes, and possibly your own food and beverages. Even if some restaurants are open for takeout or outdoor dining, they will likely have limited capacity.

We amassed some resources to help you plan before you go to the beach.

First, how safe are outdoor activities? The New York Times checked with experts who say that being outdoors with is probably fine and if you adhere to appropriate social distancing and think things through. They warn about lowering your guard too much and caution about outdoor dining, using locker rooms at pools, and navigating crowds in places like beaches. See What We Know About Your Chances of Catching the Virus Outdoors

They suggest that:

Ideally, people should socialize only with people who live in their homes, they say. If you decide to meet friends, you’re increasing your risk, but you can take precautions. It’s important to keep gatherings small. Don’t share food, utensils or beverages; keep your hands clean; and keep at least six feet from people who don’t live in your home.

 

Be cautious as you venture into public outdoor spaces … we all need to stay safe ourselves and keep our families and neighbors safe. Keep your expectations low, be flexible, and avoid crowded spots. This first weekend “free” might be too crowded, a walk or a bike ride in your local area might be the best bet. Public health officials will be keeping tabs on how things go in this first big holiday of the pandemic and it will affect how things go over the course of the summer, so let’s all be careful, safe, patient and respectful. We don’t want to undo all the good we did by staying at home over the last many weeks!

 

Reprinted from Renaissance Alliance – no usage without permission.

Traffic is down, danger is up on the nation’s roadways

If you need to venture out on the roads, be sure to drive defensively! According to recent reports, many streets and highways have turned into a dangerous environment of deserted streets given over to drag racing and speeding competitions. With so many businesses shut down and people under a stay-at-home advisory during the coronavirus crisis, nationwide, traffic has dropped by  more than 40%, according to transportation-data firm Inrix. Some large metro highways report even higher drops of between 50% to 70%. But if you think less volume makes for safer roads, think again! Unfortunately, people seem to be driving much more recklessly.

According to a report in Agency Checklists, new data from the Massachusetts Department of Transportation shows that despite a 50% reduction in overall traffic on Massachusetts roads, fatalities doubled in number during April. But this troubling trend is not unique to Massachusetts. Standard Publishing talks about a report from the Governors Highway Safety Association (GHSA):

“State highway safety officials across the country are reporting a sharp spike in speeding incidents. Multiple states have reported speed increases, with Colorado, Indiana, Nebraska and Utah noting a significant surge in vehicles clocked at 100 mph or more.”

In addition to the increase in MA fatalities, Rhode Island and Nevada state officials report that pedestrian fatalities are increasing. Even before the recent reports, pedestrian fatalities have been creeping up over time and pedestrian deaths are now at their highest level since 1988.

The Washington Post cites both the GHSA report and law enforcement and traffic experts throughout the country, and the story is the same: speeders have taken over the roadways. In addition to drag racing and high-speed competitions, the post Post reports:

What’s more, those speeding drivers are also more distracted. A study released Thursday by the data analytics company Zendrive found motorists are braking harder and using their phones more while driving. The analysis of millions of miles of driving data based on smartphone sensors found speeding is up by 27 percent on average, while hard braking climbed 25 percent. Phone usage on the nation’s roadways steadily increased in the weeks following the stay-at-home guidelines, up by 38 percent in mid-April, according to the report.

The Post says that people may think they can get away with reckless driving because law enforcement have limited resources or have reallocated resources during the pandemic. And some psychologists think it may be for excitement to counter the boredom or as an emotional release.

Hopefully, this troubling trend is a shutdown anomaly that will ease as states begin gradually reopening. But if and when you need to be out on the roads – particularly the highways – be super alert, avoid distractions, wear your seat belt, and keep your own speed down!

 

Reprinted from Renaissance Alliance – no usage without permission.

Get that idle car back on the road in tip-top shape

If you’re among the millions who have been hunkered down in your home to help flatten the coronavirus curve, your car probably hasn’t been getting too much use. But now as many states are beginning to reopen and ease restrictions on stay-at-home orders, it’s time to show your car a little love. And even though many restrictions may be lifted, it’s likely we’ll be seeing a “new normal” so you may still be keeping a little closer to home this year than in other summer seasons. If so, AAA offers some great tips for keeping your car maintained during a driving hiatus.

While a few of the tips might be well known – taking the car for a spin each week and keeping it clean and maintained – others may be things you would not think of unless you are accustomed to storing a car seasonally. Here’s one you might not think about – and it can happen even if your car is stored in a garage:

Depending where you park, there may be mice or other critters that want to call your vehicle home. These rodents can chew on wires and cause thousands of dollars of damage, make nests in your filters and cause other messes. I’ve even had one set up shop in my glove compartment! There are a variety of sprays and granules on the market to deter these animals. Some have the scent of a predator and others smell like mint — a scent rodents don’t like.

There are other good tips about lubricating locks and hinges, adding a gas stabilizer to your tank, and more.

Consumer Reports says that cars do not like to sit idle, and cite risks such as the battery losing charge, tires gaining flat spots, rubber components such as belts and wipers drying out, as well as the critter problem. They also have an excellent guide to Car Care and Maintenance During the Coronavirus Pandemic.

But don’t stop there – it’s time for a thorough spring maintenance. Whether you bring your car to a mechanic or are a do-it-yourselfer, here’s a spring car maintenance checklist:

  • Give your vehicle a good exterior cleaning, including a fresh wax.
  • Clean the interior thoroughly. To disinfect and deep-clean, consider a detailing or a steam cleaning.
  • Change your oil and oil filter.
  • Check and replenish fluids.
  • Inspect wiper blades and replace if needed. Refill your wiper fluid.
  • Test your battery.
  • Check and rotate your tires. Check the tire treads and pressure.
  • Check and clean your lights and mirrors.
  • Check filters, belts, hoses.
  • Check alignment and suspension.
  • Fix any winter body or windshield dings or damage.

And if you have a motorcycle, May is Motorcycle Safety Awareness Month. Give your wheels a good checkup too – see our post on Motorcycle Mania: Your spring guide to insurance, safety, training, laws and more.

Reprinted from Renaissance Alliance – no usage without permission.

Insurance lingo watch: Actual cash value vs replacement costs

Sometimes, insurance lingo is quite confusing. Even simple terms can be misunderstood when you review your policies. One question that our agents hear all the time is “What’s the difference between cash value vs. replacement costs in homeowners insurance?” Here’s the scoop.

Cash value insurance coverage is the cost of the item minus depreciation. So, if a fire destroyed your entire home or a thief broke in and stole your TV, you would be paid for the cost of your home or TV less depreciation. That means you might not realize enough payment to rebuild your home or replace your TV in today’s market without dipping into your own pocket to supplement the costs.

Replacement cost insurance coverage, on the other hand, does not factor in depreciation. It pays you the cost to rebuild/replace in today’s marketplace. Most homeowners insurance policies quoted are for “replacement cost” by default but always check to be sure. Even with replacement cost coverage as an option, you need to review your policy limits with your insurance agent regularly to be sure they are sufficient for your needs.

There’s a third, less-common option called guaranteed or extended replacement cost. The Insurance Information Institute explains:

This policy offers the highest level of protection. A guaranteed replacement cost policy pays whatever it costs to rebuild your home as it was before the fire or other disaster–even if it exceeds the policy limit. This gives you protection against sudden increases in construction costs due to a shortage of building materials after a widespread disaster or other unexpected situations. It generally won’t cover the cost of upgrading the house to comply with current building codes. You can, however, get an endorsement (or an addition to) your policy called Ordinance or Law to help pay for these additional costs. A guaranteed replacement cost policy may not be available if you own an older home.

As we noted, in most policies, replacement cost would be the default, but check. So why would anyone opt for actual cash value rather than guaranteed or extended replacement? Like most things in life, it comes down to cost. There may be some instances when an actual cash value coverage makes sense, such as on a vacation home.

Even when you have replacement cost coverage, there are some instances when that coverage might not be enough. One example is in the case of items that are irreplaceable or that increase in value over time, such as art, antiques, or special collections. Plus, most insurance companies set limits on how much a standard homeowners policy will cover for valuable items such as jewelry and furs. If you have valuables or special collections, talk about those with your independent insurance agent. You might need a policy add-on called a floater (more lingo!) to extend coverage for those items.

Of course, there are other coverage issues you need to consider in a homeowners policy, such as liability coverage. The Insurance Information Institute offers a good primer with guidelines on how to protect your home and your assets with adequate insurance coverage: How much homeowners insurance do I need?

There are no dumb questions, just dumb lingo

Insurance can be very confusing and that’s why having an agent as a guide can be great. Many TV ads make car and home insurance seem like simple choices, but as the saying goes, the devil is in the details. It’s important to fully understand what an insurance policy does and doesn’t cover so that you don’t face any unpleasant surprises at the time of a loss. Make sure that you talk over any lingo or unfamiliar terminology in your policy with your agent.

Reprinted from Renaissance Alliance – no usage without permission.