Terry Newton said:
Many don't know that homeowner's insurance generally doesn't cover squat. I think my policy covers around $1,500 on guns, and it is quite possible in this day and age for that to not even cover one, much less a collection.
This is fundamentally important to know. A lot of people will say, "Oh, my home owners insurance has a quarter of a million dollars worth of content coverage. I'm fine." Well, the only thing that's fine is the fine print which you had better read.
That quarter-of-a-million has sublimits. Typical sublimits on a homeowners policy:
Jewelry: $2500. A single wedding ring or one fine watch can easily be worth this.
Firearms: $1000 (and a lot are even lower). Guns are a favorite theft item and they're also a favorite insurance fraud item since there's a ready black market for 'em. But a thousand dollars? One nice gun can be easily worth that.
Collectibles: $5000. Insurnance defines collectible as anything that has special value because of its special quality, artistic merit, maker, or history.
Cash: $200. But my wallet frequently has more than $200 cash in it.
Watercraft: $2000. If you've got any of those jet skis or personal watercraft, don't count on your basic home owners policy.
Silverware and goldware: $2000. Most people got theirs as wedding gifts so they aren't fully aware of its value.
Notice also that no basic homeowners policy covers flood damage. You might say, "But I live well above the flood plane. I've got nothing to worry about." But flood is defined for insurance purposes as just about any water entering the property horizontally, basically any water except rain through a leaking roof. My homeowners policy includes no fewer than fourteen definitions of flood including, "water or any other substance that backs up through sewers or drains," "movement of water or any other substance on or below the surface of the ground regardless of its source which exerts pressure on, or flows or seeps or leaks thorugh any part of the residence." So, even if you live well above a flood plane, you may want to consider flood insurance.
Notice also that most basic homeowners policies do not include earthquake coverage.
These extra coverages cost money. One way to save money is to take a higher deductible. Theoretically, if a tree died on your property, your homeowners insurance might cover that. But, in reality, if you nickel and dime the insurance companies with these sorts of claims, even if you paid for the low deductible, your rates will skyrocket. So, don't think of insurance as covering life's everyday bumps and bruises but as covering disasters and choose your deductible accordingly.
