CL&C Insurance Company
500 South Broad St. P.O. Box 1034 Meriden, CT 06450-1034
Public Relations Office:
FOR IMMEDIATE RELEASE & THEREAFTER RECENT SPATE OF HOME RENOVATIONS
COULD MEAN INSURANCE PROBLEMS AHEAD Making Good Choices Now Can Avoid Coming Up Short on Your Coverage Meriden CT - January 20, 2005 - Many homeowners may be underinsured and not realize it until it is too late. The two primary types of replacement cost coverage have conditions that, if ignored, could leave homeowners coming up short, particularly those who have recently done home renovations. "The most important thing a homeowner can do is review their policy annually and keep it current," said Ray Palermo, director of public relations for Connecticut Life & Casualty Insurance. "Many homeowners have taken advantage of low loan rates and made improvements to their homes. If they don't update their coverage to reflect the true replacement cost of the home, that can be disastrous when they need it most - when they have a claim" He explained that Guaranteed Replacement Cost coverage, which is increasingly difficult to obtain, will pay to replace your home regardless of the cost to the insurance company. However, the more common type, Extended Replacement Cost, will only pay the stated amount on the policy plus, typically, an additional 20% to 25%. Both generally require insuring the home to 100% of its replacement cost and also informing the insurance company of additions or remodeling. Homeowners are advised to do an annual review and notify their insurance company of any shortfalls in coverage. Some factors to consider in establishing current home value and appropriate coverage include:
"There's a misconception that if you don't let your insurance company know about a home improvement, you're somehow putting one over on them because you'll save on your annual premium and still be covered in the event of a major claim," said Palermo. "Unfortunately, that may be putting your largest asset in jeopardy and sort of defines the old expression of being 'penny wise and pound foolish.'" If uncertain about how to determine a home's value, owners can contact their insurance company, who can usually do a property valuation and recommend coverage levels and deductible amounts that meet their needs.
Connecticut Life & Casualty is offering a free brochure, "Are you coming up short on your homeowners insurance?" It is available at their website, www.cl-c.com, or by e-mailing them directly at websc@cl-c.com.
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