While I don’t always see eye-to-eye with Suze Orman on many issues, a recent post in her column over at Yahoo! Finance brings up some very important questions in regards to homeowners insurance. The quiz is as follows:
- If your home is destroyed due to a loss (fire, for example) covered by your policy, the payout you receive will be equal to:
- Whatever it takes to rebuild my home to the standard it was before the loss.
- 125 percent of the dwelling limit coverage stated on my policy.
- 100 percent of the dwelling limit coverage stated on my policy.
- The value of my home’s materials at the time of the loss.
- I have no clue.
- The coverage amount of my policy is adjusted annually for inflation.
- Yes.
- No.
- I have no clue.
- If my possessions are stolen or damaged in a covered loss, my payout will be equal to:
- The depreciated value of the possessions at the time of the loss.
- The cost to buy new replacements.
- I have no clue.
- If I can’t live in my home while it is being repaired or rebuilt, my policy will help me pay for another place to live for:
- A maximum of 12 months with no dollar limit.
- A maximum of 12 months with a dollar limit.
- An unlimited period of time with no dollar limit.
- I have no clue.
- If I’m ever sued and must pay a large judgment, I have enough personal liability coverage so that I won’t be forced to sell my home or other assets to settle the payment.
- Yes.
- No.
- I have no clue.
Check out the article for how your results turned out. To my surprise, even though we just purchased a new policy about a year ago, I was not 100% sure on a few of the questions myself. This is a great opportunity to pull out your policy and make sure you understand exactly what it covers and see if you need to make changes.
Author: Jeremy Vohwinkle
My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.
