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❖ Tip: Record a video inventory of the con- tents of your home, including items stored in structures such as a garage or shed. Update the video annually and store it in a safe deposit box. In the event of a loss, you will have an accurate record of your possessions, which makes a claim easier to process.

PHOTODISC

Home
insurance 101
Protecting
your biggest
investment

❖ Tip: A quick way to estimate the amount of insurance coverage needed is to multiply the total square footage of the home by the local building cost per square foot. To determine the building costs in your area, contact a local real estate agent or builders association, or use one of the many online building-cost estimators.

Additional living expenses. In the event that a major covered loss such as a fire or severe storm makes your home uninhabitable, additional living-expense coverage will pay for items such as restaurant meals, hotel or rental bills, and other living expenses that you incur while your home is being repaired. Home insurance policies generally provide about 20 percent of the amount of insurance on the structure of a home for additional living-expense coverage.

Liability coverage. Home insurance provides liability coverage for injuries or property damage that you or family members cause to other people. Make sure liability limits are enough to protect your assets; if you have investments, savings and/or additional property that are worth more than your current liability limits, you may want to purchase an excess-liability policy, often called an umbrella policy.

IF YOU ARE LIKE MOST people, buying a home is the largest investment you will make in your lifetime. Home insurance helps protect that investment by providing coverage for the building itself, your personal possessions and liability for injuries to others while they are on your property.

What is the right amount of coverage to protect your assets? An insurance industry survey in 2008 reported that 64 percent of homes in the U.S. are underinsured. That means more than half of all homeowners would not have enough coverage to rebuild their homes if they suffered a total loss.

Consider the following guidelines and tips from Ameriprise Auto & Home Insurance when reviewing your home insurance needs.

Housing structure. Be sure to have enough insurance coverage to rebuild your home based on current construction costs in your area, not on what you paid for your home, and don’t include the cost of the land. The cost to rebuild a home may be more or less than the price originally paid for the property.

Actual cash value versus replacement cost. Actual cash value pays to replace a home and possessions minus the cost of depreciation. That means if a claim is filed for a five-year-old TV, you will be paid the value of a five-year-old TV, which could be less than you expect. Replacement cost will replace your home and possessions for the actual cost without deducting depreciation. The premiums for replacement-cost insurance coverage can cost more than those for actual cash value coverage, but you are more likely to get an accurate reimbursement for your loss. Refer to your policy for complete coverage details.

Personal possessions. The coverage for personal belongings is based on the coverage on the structure of your home—typically between 50 and 80 percent of that amount. To make sure this is adequate, you should create a home inventory of all of your possessions, including the costs to replace each item. Standard home policies provide limited coverage for certain high-value items, such as fine art, jewelry or computers. Consider adding special personal property endorsements to your policy as additional coverage.

❖ Tip: Liability insurance also pays for legal expenses from a liability lawsuit. Homeowners should have at least $300,000 to $500,000 of liability coverage to protect their assets. Umbrella liability policies extend to both auto and home insurance and provide broader coverage for libel, slander and invasion of privacy—items excluded on standard auto and home policies. C

The membershipadvantage

Insurance is underwritten by IDS Property Casualty Insurance Company and Ameriprise Insurance Company, both in De Pere, Wisconsin. Each company is a subsidiary of Ameriprise Financial, Inc. Discounts and savings vary by state and apply to certain coverages. Insurance availability and coverage may vary by region or state. Ameriprise Auto & Home Insurance’s California license number is 0C41813. Costco Insurance Agency, Inc.’s California license number is 0D08407. See the Ameriprise Auto & Home Insurance ad on the back cover of this issue for more details.

COSTCO MEMBERS are eligible for significant savings, outstanding service and exclusive benefits from Ameriprise Auto & Home Insurance, as more than 275,000 members have already discovered. In most cases you will receive a discount on your insurance premium just for being a Costco member.

Get a qualified auto insurance quote in May 2011 and Ameriprise Auto & Home Insurance will donate $5 to participating children’s hospitals. Since first partnering with Costco in 2008, they have helped raise more than $240,000 for the Children’s Miracle Network Hospitals.