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Disaster- Are You Prepared?

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Most governmental bodies, institutions and large businesses have some sort of disaster preparedness plan. Do you?

It seems like not a year passes that some fire out west destroys dozens, if not hundreds of houses incinerated in its path. Whether its a western wildfire or just a stovetop grease fire that burns down your house, make sure that whatever you lose to a fire, youve got the coverage you need. As with any insurance decision, I recommend you speak with a licensed professional agent. Here are a few things to consider:

1. Replacement. Ask your agent if your insurance policy covers only the current value of the property that is covered, or if your policy has so-called replacement cost coverage. I highly recommend you have replacement cost coverage  it might cost a lot more to replace the property you lose than it was worth at the time of the fire or the other disaster.

2. Natural disasters. Often a basic homeowners insurance policy either does not cover or greatly limits coverage for certain natural disasters, such as a loss by water (flood) or wind (hurricane, tornado, etc). This kind of protection can be obtained through a special policy. So ask your agent about what your policy covers and if an additional, separate policy might be in order.

3. Exclusions. Make sure you discuss with your agent what all your current policy excludes. The worst time to learn about an unexpected exclusion is after the event has taken place.

4. Valuables. Most homeowners policies offer limited coverage for special valuables and collections. Make sure you disclose all of this to your agent and discuss what special endorsement riders might be added to your policy to cover things like valuable jewelry and any valuable collections. Speaking of which&

5. Collections. Do you have an especially unique or valuable collection? It may be valuable to you, but unless it has been officially appraised, youre going have a tough time convincing the insurance company you had a mint condition Babe Ruth rookie card. Or a Chicago Cubs World Series pennant.

6. Photo or video images. Here is another instance when a picture is worth a thousand words. Walk through your home with your phones video camera rolling, identifying all the contents of your home. This easy to do inventory can really come in handy during a claim.

7. Savings. You cant insure everything little thing. Thats why adequate savings are part of the disaster contingency plan of any financially healthy person or family. Work to build up six months of gross annual income in your savings.

Your level of preparedness will make the difference in whether a fire or flood is just a huge aggravation or a total disaster.

Byron is a Certified Financial Planner and Managing Director of the Planning Group at Argent Advisors, Inc.
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