Insurance, Divorce and Your Home
- When you own a home or if you rent, often you have to have some type of insurance (homeowners or renters). It is important to understand your coverage and what your insurance does not cover. During a divorce it is a good idea to review your insurance policies.
To properly protect your home and your car, you need two basic insurance policies:
Homeowner's or renter's insurance, which covers the value of your belongings against physical damage and theft.
Things you should know about Homeowner's Insurance:
What is home insurance?
A home insurance policy is a contract between you and an insurance company. In exchange for your premium payment, the insurance company promises to pay for financial losses caused by a broad range of calamities that could damage your home or your property, if they occur during the period of the contract and subject to the terms and conditions of your policy. The insurance company also promises to pay damages resulting from injuries or damage to other people, for which you are held legally responsible.
What affects your home insurance rates?
The location of your home - A house near a fault line in California costs more to insure than the same home in Idaho. Homes built on sand are also more costly than homes built on bedrock. (It's a safe bet the little pigs that built their houses of straw and twigs would have paid a pretty penny for homeowner's insurance if they had survived that encounter with the wolf.) The year it was built - Statistically, newer homes are less susceptible to fire and other hazards, and are therefore less costly to insure. Closeness to a fire station and fire hydrants - The greater the chances of putting out a fire once it starts, the lower your premiums will be.
What can you do to reduce them?
Get a smoke detector - It's the law in most states, and a few extra smoke detectors will help to lower your premiums - - so will fire extinguishers.
Lock up - Deadbolt locks will increase your security and reduce your rates.
Make those improvements - Home improvements to older homes will reduce the likelihood of a loss, and therefore cut your premiums. Replacing the roof, upgrading the pipes, and rewiring the house will help reduce your insurance rates.
Some items require special coverage
Homeowner's/renter's policies typically provide only limited coverage for specific items of
value like jewelry and works of art. If you own items whose value exceeds the standard
dollar limits of coverage in your policy, you may want to consider buying extra coverage in
the form of an insurance floater. Here's the maximum amount of insurance (insurers call it
'the limit of indemnification') most insurers stipulate for specific items in a standard
Money, bank notes, bullion, coins and metals
Securities, manuscripts, stamp collections, and valuable papers
Water craft including their trailers, equipment and motors
Property on the residence premises used for business purposes
Property away from the resident premises used for business purposes
Loss of jewelry, watches, fur, and precious and semiprecious stones by
Loss of firearms by theft
Loss of silverware, silverplateware, goldware, goldplateware, and pewter
Limit of Indemnification
Resources & Tools
PROTECTION AFTER DIVORCE -- COBRA, the Consolidated Omnibus Budget Reconciliation Act, protects ex-spouses even after one of them remarries, for a fixed period of time, as well as employees who lose their positions. COBRA establishes a time line for picking up coverage (which must be religiously observed), and it is very expensive.
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