When you think of retirement, financial planning may be the first thing that pops in your mind, while insurance may not register high on your priority list. Whether you are already retired, newly retired or still in the planning phases, review the following areas to see how your personal insurance program should be structured.
- Full Replacement Cost Coverage: Your main home – along with any vacation or second homes – probably represent the largest components of your net worth. Many people assume they have full replacement cost coverage, when they only have basic replacement coverage. Basic replacement coverage only amounts to only 20-25% above coverage limit. By securing full replacement cost coverage, you would be able to completely rebuild in the event of loss. Full replacement, or guaranteed replacement, cost coverage often provides for other structures on your property like driveways, walkways, pools and detached garages.
- Building Cost Upgrades: Many retirees live in homes that are more than 25 years old. Upgrades are often needed to bring homes up to code, and most policies only offer basic coverage, providing up to 10% of the total coverage amount to be put toward upgrade costs. Homeowners can add a special endorsement for building code upgrades to their coverage that allows for a specific percentage above the standard 10%.
Personal Property Insurance
- Inventory Personal Property: As people age, they usually increase the quantity and quality of personal property. By taking an inventory of everything they own, you’ll be able to estimate how much it could cost to replace everything you own. Most home insurance policies set content coverage at 50-70% of the cost to replace the home structure, which leaves many homeowners under-insured for their personal property.
- Valuables Policy: Most homeowners rely solely on their homeowners’ policy to insure their personal property, including their precious collections of jewelry, art, wine and other items. As we discussed above, the coverage often does not insure all personal property, especially these high value items. Securing a valuables policy will ensure proper coverage.
- Purchase Umbrella Liability Insurance: Provides liability protection above standard coverage in your auto and homeowner insurance policies.
- Protection for Board Members & Directors of Charitable Organization: Even volunteer board members and trustees can be sued personally for actions of charitable organizations. Not-for-profit director’s and officer’s coverage will guard against this threat.
- Trust and Limited Liability Companies on Insurance Policies: Many people will place homes, collections and other assets into trusts to protect and maximize transfer of wealth to offspring. Families need to make sure all trusts and LLCs are named on insurance policies to ensure they are protected against liability lawsuits
At Penny Insurance, we are here to consult and advise on the best way to protect you and your loved ones during the golden years. Give us a call today, and we will work with you to plan for these and other eventualities.