Redwood Credit Union recommends you review your insurance coverage every year—or sooner if you’ve had significant life changes. The beginning of the year is a great time to check with your insurance agent or carrier to assess your coverage and fill in the gaps. Here are some things to keep in mind:
Making improvements or renovations to your home will affect its “insurance to value” ratio. This is the amount of insurance you have versus the value of your home. Be sure to take this ratio into consideration when calculating whether you have adequate coverage.
Even if you haven’t made any improvements to your home, it’s important to understand your homeowners policy and what it does—or doesn’t—cover. You may think your insurer will pay the full cost to replace your home if it were destroyed by a covered occurrence. But many policies place a cap on replacement cost up to the amount stated on the policy. You may want to check with a building contractor to get an idea of the replacement cost for your home, then compare it to your policy to be sure you have enough coverage.
There are certain natural disasters that might not be covered by your homeowners insurance policy. Common exemptions from your policy may include:
If you live in an area especially prone to these natural disasters, chances are your regular homeowners policy won’t cover damage to your home. Instead, you need to purchase separate coverage to make sure you are adequately covered. Otherwise, the repair/rebuilding costs are borne entirely by you.
To avoid gaps in coverage, review your policy regularly with your insurer. Also, pay attention to notices you receive from your carrier. What may look like boilerplate language could actually be significant changes to your coverage. Don't rely on your interpretations—seek an explanation from your insurer or agent.
Do you have “Guaranteed Asset Protection” (GAP)? If not, you may want to add it to your auto collision policy. If your vehicle is deemed a total loss due to an accident, the amount you owe on your auto loan may be more than your insurance settlement. Guaranteed Asset Protection (GAP) helps to cover that remaining loan balance.
Review which drivers and vehicles are covered by your auto insurance. Most policies provide coverage for you and family members residing with you, but it's not always clear-cut. For instance, a child living in a college dorm is probably covered, but a child who lives in an off-campus apartment might not be. If you and your spouse divorce, which policy insures your children, particularly if they are living with each parent at different times of the year? Notify your insurer about any change in living arrangements to avoid a gap in coverage.
Other considerations are whether your coverage includes damaged batteries, tires, and shocks, or stolen or damaged cell phones or other electronic devices. Your policy may also limit the amount paid for a rental while your vehicle is being repaired.
Insurance coverage for rental cars is also something to consider. Your collision coverage may apply to the rental car you're driving, but may not pay for all the damages alleged by a rental company, such as loss of use costs. If you're leasing a car long term, your policy may cover the replacement cost only if the car is a total loss or is stolen.
Insurance policy terms and conditions aren't always easily understood, and you may not be sure what's covered until it's time to file a claim. Review your insurance policies regularly to be sure you've filled all the gaps in your coverage, and if you’re unsure, ask your agent or call RCU Insurance Services at (707) 576 -5120 for assistance.
Insurance products are not deposits of Redwood Credit Union and are not protected by the NCUA. They are not an obligation of or guaranteed by Redwood Credit Union and may be subject to risk. Any insurance required as a condition of an extension of credit by Redwood Credit Union need not be purchased from Redwood Credit Union and may be purchased from an agent or an insurance company of the member's choice. RCU Insurance Services is a wholly-owned subsidiary of Redwood Credit Union. Business conducted with RCU Insurance Services is separate and distinct from any business conducted with Redwood Credit Union. License no. 0D91054.