Homeowner's insurance

Homeowner's insurance

Finally, here's a few more pointers regarding other kinds of insurance.

When buying home owner's insurance, you probably don't need to cover more than 80 percent of your home's value. Typically, a home's structure is worth only 80 percent of the total value. The other 20 percent represents the value of the land and foundation.

Even if your home burns down, for example, the value of the land should remain undiminished. But you should purchase replacement value insurance to keep up with inflation.

Also remember that most home owner's policies do not cover floods and earthquakes. Many people skip this coverage, and assume that the federal government will bail them out.

So far the government has provided help, but this help has been in the form of loans that you must pay back. And remember there's no guarantee that such aid will continue.

Miscellaneous insurance items

And for those of you who've already built up a considerable net worth, you may want to get umbrella insurance. This type of insurance, when obtained through your present insurer, can provide hundreds of thousands of dollars of general liability insurance for you at a low cost.

Finally, before you buy any of insurance, make sure you check the credit rating of the insurer. Check out the insurer with rating agencies such as AM Best, Standard & Poors or Weiss Research.