Insurance checkup can save money in long run

Homeowners should review their home insurance coverage on a regular basis to ensure they are not underinsured, according to Leslie Caprow, director of the private client insurance practice for Kaercher and Associates Insurance Brokerage in Las Vegas.

"Everyone who owns a home should look at their policy at least every other year, or when they've made changes to their lifestyle," Caprow said, noting that such changes include expansions or additions to a home, the purchase of big-ticket items, remodels -- anything that adds value.

A homeowner's insurance policy is based on the cost of rebuilding a house rather than on the amount for which it could be sold.

"You could be underinsured if you haven't looked at your insurance policy in five years," Caprow said. "Your house is probably worth more now."

Summerlin resident Jim Nelson said he knows the value of such policies even though his home is new and he does not foresee any problems.

"I had a house in Los Angeles, and because of a leaf buildup in the gutter system there was a huge flood," Nelson said. "Fortunately, I had a good homeowner's insurance policy which made the aftermath a lot smoother."

The Nevada Insurance Council, a nonprofit organization dedicated to consumer education, recommends compiling a photo inventory of the interior and exterior of the household, as well as making an itemized description of personal property room by room.

"It's best to be prepared for unexpected loss of property due to burglary, theft, fire, wind, flood or other damage by keeping an accurate and up-to-date record of your property," Susan Bithell, council president, said. "In the event of a serious loss, this inventory list will speed up the claim process and make it easier for you to describe and verify damaged or stolen items."

Cathy Smith, personal lines marketing manager for the Chubb Group of Insurance Cos., recommends that homeowners evaluate the strength of their policy by asking their agent several key questions.

Those questions include: How was the amount of insurance coverage for the home determined? Were the unique and custom features of the home accounted for? If the home is severely damaged in a covered loss and the cost to rebuild or repair it exceeds my policy limit, how far above that limit will my policy extend?

Caprow said policyholders should also be aware of how much excess liability coverage they are carrying.

"In today's litigious society, affluent homeowners carrying only $1 million or $2 million in excess liability are probably underinsured. I recommend at least $5 million for my clients, which typically costs less than $1,000 per year. Excess liability coverage is probably the most cost-effective form of insurance available and the most life saving," she said, pointing out that the defense of a single lawsuit can cost thousands of dollars even if the defendant wins.

"Excess liability coverage, or an umbrella policy, covers things such as someone slipping and falling on your property, if your dog bites someone, if someone gets hurt on your property and it's perceived to be your fault, or even if one of your children throws a party and there is an accident. When these things happen, standard liability coverage built into your homeowner coverage may not be enough to satisfy the judgments against you."

All agreed that the most important factor is to be an educated consumer and ask questions.

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