What exactly do you know about homeowners insurance, other than the bank requires you to get coverage in order to obtain a loan for the home you purchase?
According to the National Association of Insurance Commissioners (NAIC), only 45 percent of Americans feel confident enough to make insurance decisions!
Where do you stand? There’s no time like the present to enhance your insurance literacy. The more you know, the better able you are to protect yourself, your family and your largest investments. Test your knowledge and learn more with this short quiz:
TRUE OR FALSE?
1. Your homeowners coverage should equal the purchase price of your home.
2. Your homeowners insurance policy covers flood damage.
3. A solution for people who want extra levels of liability insurance protection above the limits provided by their Auto and Homeowners Policies is called an Overflow Policy.
4. Your address may impact your auto insurance rate.
5. Your life insurance policy should cover 10 times your yearly income.
ANSWERS
1. False. It’s up to you to choose the coverages and limits that meet your needs, but it’s best to insure your home for at least 100 percent of its estimated replacement cost —the cost of repairing or replacing your home to restore its original condition. Estimated replacement cost is different from market value or purchase price. If you select a coverage amount lower than the estimated replacement cost, certain coverages may be unavailable to you. Periodically review your coverages and limits with your agent and notify your agent of any changes or additions to your home.
2. False. Homeowners policies typically exclude flood coverage. Adding coverage may be worth looking into, no matter where you live. According to the National Flood Insurance Program (NFIP), more than 20 percent of all flood claims happen in moderate- to low-risk areas. State Farm® agents enrolled in the NFIP Direct Program are able to write and service flood insurance .coverage for qualifying homes directly through the federal government program, NFIP Direct.
3. False. A Personal Liability Umbrella Policy layers on top of your existing existing underlying policies to provide extra protection when home and auto liability limits are exhausted. Your agent can help explain how a Personal Liability Umbrella can help ensure that your family and financial health are protected in the event of an accident or lawsuit.
4. True. People who live in densely populated areas—noted for higher occurrences of accidents and theft—will likely pay more for auto insurance than those who live in rural areas, where accidents and theft are less prevalent. Other factors that may influence the cost of auto insurance: vehicle type, coverage, and driving record.
5. False. There is no “one-size-fits-all” formula for selecting life insurance coverage—it’s a personal matter. The State Farm Life Insurance Calculator can estimate the amount of coverage you may need to help protect your family.
Want to know more? Enhance your knowledge of insurance by talking to your State Farm agent. Establishing an open dialogue with your State Farm agent is the best way to answer any questions you may have.
Article submitted by Brennan Purdy of State Farm Insurance
My vision is to be an insurance professional whose actions are driven by keeping the customer's best interest as my primary goal. My staff will treat all my customers in a caring, friendly, and professional manner. My office will provide warm, efficient, and seamless services to our customers at all times. I expect my business to be comprised of knowledgeable, multiple-line customers who see my office as their first and best choice for all their insurance and financial service needs
For more information on these and other home safety tips, stop by my office or visit www.brennanpurdy.com. My office is conveniently located in downtown Bethel. 203-798-7300. 211 Greenwood Avenue , Bethel, CT 06801
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