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Making Sure Your Home Is Properly Covered for a Disaster

For many people, their home is their greatest asset, so it is crucial to avoid being underinsured. To protect their investment from disasters, homeowners should update their insurance regularly to include improvements, major purchases and increased rebuilding costs.

Since the end of the Great Recession in June 2009, despite the major drop off in construction activity, construction prices have actually risen significantly. Furthermore, after a disaster, materials and labor may become scare, driving repair and rebuilding costs up even further.

To properly insure your home, it is important to ask your insurance agent or company representative four key questions.

1. Do I have enough insurance to rebuild my home?

Your policy needs to cover the cost of rebuilding your home at current construction costs. Unfortunately, some homeowners simply purchase enough insurance protection to satisfy their mortgage lender. Others confuse the real estate value of their home with what it would cost to rebuild it. Quite simply, you should have enough insurance to rebuild your home in the event that it is completely destroyed. Be sure to consider the following:

Replacement Cost
Most policies cover replacement cost for damage to the structure. A replacement cost policy pays for the repair or replacement of damaged property with materials of similar kind and quality.
Extended Replacement Cost
This type of policy provides additional insurance coverage of 20 percent or more over the limits in your policy, which can be critical if there is a widespread disaster that pushes up the cost of building materials and labor.
Inflation Guard
This coverage automatically adjusts the rebuilding costs of your home to reflect changes in construction costs. Find out if your policy includes this coverage or if you have to purchase it separately.
Ordinance or Law coverage
If your home is badly damaged, you may be required to rebuild it to meet new (and often stricter) building codes. Ordinance or law coverage pays a specific amount toward these costs.
Water Back-Up
This coverage insures your property for damage from sewer or drain back-up. Most insurers offer it as an add-on to a standard policy.
Flood Insurance
Standard home insurance policies provide coverage for disasters such as fire, lightning and hurricanes. They do not include coverage for flood (including flooding from a hurricane). Flood insurance is available through the federal government’s National Flood Insurance Program (www.floodsmart.gov), but can be purchased from the same agent or company representative who provides you with your home or renters insurance. Make sure to purchase flood insurance for the structure of your house, as well as for the contents. Excess Flood Protection, which provides higher limits of coverage than the NFIP in the event of catastrophic loss by flooding, is available from some insurers. Keep in mind that there is a 30-day waiting period before the insurance is valid.

2. Do I have enough insurance to replace all of my possessions?

Most homeowners insurance policies provide coverage for your personal possessions for approximately 50 percent to 70 percent of the amount of insurance you have on the structure of your home. So if you have $100,000 worth of coverage on the structure of your home, you would be covered for $50,000 to $70,000 worth of the contents of your home, depending on the policy.

The best way to determine if this is enough coverage is to conduct a home inventory, which details everything you own and the estimated cost to replace these items if they are stolen or destroyed by a disaster. To help with this task, you can download the I.I.I.’s free home inventory software [link]. Remember to keep your home inventory in a safe place, and take it with you if you need to evacuate your home during a disaster.

You can insure your possessions in two ways: by their actual cash value or their replacement cost. Make sure you review with your agent or company representative which type of coverage is best for your particular situation.

Cash Value Policy
This coverage pays the cost of replacing your belongings minus depreciation.
Replacement Cost Policy
This coverage reimburses you for the full current cost of replacing your belongings.
To illustrate the difference between the two types of policies, suppose, for example, a fire destroys a 10-year-old television set in your living room. If you have a replacement cost policy for the contents of your home, the insurance company will pay to replace the TV with a comparable new one. If you have an actual cash value policy, it will pay only a small percentage of the cost of a new TV set because the old TV has been used for 10 years and is now worth a lot less than its original cost. Some replacement cost policies specify that the new item be purchased by the insurance company as they may be able to purchase at a bulk or special rate. The price of replacement cost coverage is about 10 percent more than that of actual cash value.

3. Do I have enough coverage for additional living expenses?

Coverage for additional living expenses pays the extra costs of temporarily living away from your home if you can’t live in it due to an insured disaster such as a hurricane. It covers hotel bills, restaurant meals, transportation and other living expenses incurred while your home is inaccessible or being rebuilt. It is important to note that it covers only those expenses that are over and above your regular living expenses, so it would not cover your mortgage, or regular trips to the grocery store. If you rent out part of your house, this coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.

Coverage for additional living expenses differs from company to company. Many policies provide coverage for about 20 percent of the insurance on your house. Some companies will sell you a policy that provides you with an unlimited amount of loss of use coverage, for a limited amount of time.

Make sure you know exactly how much coverage you have for additional living expenses, and whether there is a time limit. If the standard coverage is not adequate, it can generally be increased for an additional premium.

4. Do I have enough insurance to protect my assets?

Although not a key element in disaster planning, it is also important to have adequate liability protection. This covers you against lawsuits for bodily injury or property damage that you or your family members may cause to other people. It also pays for damage caused by pets. Liability insurance pays for both the cost of defending you in court and for any damages a court rules you must pay—up to the limits of your policy. Most homeowners insurance policies provide a minimum of $100,000 worth of liability insurance, but higher amounts are available.

It is important to purchase enough liability insurance to protect your assets. If the standard liability coverage in your homeowners policy is not sufficient, you may need an excess liability, or umbrella, policy, which provides additional coverage over and above what is covered in your home (and auto) insurance policy.

If you do suffer damage from a disaster, contact your insurance agent as soon as possible and begin the claims filing process. Also if you need the assistance of FEMA, here are their Frequently Asked Questions about FEMA Disaster Assistance.

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Why December Is The Best Time Of Year To Look For Work

Savvy job-seekers might know how to write resumes and cover letters, but few are aware of this surprising fact: Contrary to popular belief, December is actually the best time of year to look for work!

There are two compelling reasons why this is true–

#1 Competition levels drop dramatically. The majority of job-seekers figure that the holidays are a waste of time and make only marginal efforts to search for a new position. But their unfortunate mistake can turn into your big advantage because…

#2 Hiring takes off in the New Year. Although interviewing for full-time employees takes a dip in December, the months of January and February typically generate the strongest hiring period of the year. Organizations kick-off new projects and initiatives, budgets are put into place and additional staff is required to carry out the company’s plans.

Accordingly, if you take full advantage of the opportunities that the holidays have to offer, you may well find yourself as a sought after candidate–one who’s first in line to be interviewed in early January. To ensure you are making the most of this special time of year, here are three holiday practices you will want to adopt:

Practice the art of seasonal schmoozing. The holidays are filled with parties, gatherings, and community events. These are all prime opportunities to mix, mingle and share your story. Be certain, however, that you don’t dampen the festivities by trying too hard. Resist the temptation to deliver a rehearsed elevator speech unless you are attending a formal industry event where such introductions would be commonplace. Even then, make sure you judge the mood of the merrymakers before you come across as too stiff or businesslike.

At informal gatherings, a light touch is always best. When asked what you do, you can reply with a snappy one-liner that will pique your listeners’ interest. For example, a department store buyer used this playful response when asked about her career, “I shop with other people’s money.” (You can bet ears perked up with that one!) Once the buyer had the attention of her audience, she then continued with a lengthier description of her skills, experience and job search goals.

Reconnect with old contacts. Holiday cards and folksy letters are not only welcomed, they’re expected. Done correctly, they can be a great way of securing new leads and opportunities. After sharing the latest news about your family, you can mention your job search and add a few of the companies you are targeting. Then in a low-key manner, you can let your friends know that you’d appreciate any suggestions or contacts they might have.

You can also send holiday greetings to recruiters you’ve worked with in the past, reconnect and update them on your search. Recruiters are busy people and can easily forget candidates. So your greeting may well put you at the top of their minds in a favorable light. And, if you are very lucky, they might have the ideal job cross their desk just as your greeting appears in their inbox.

Network in new and innovative ways. Volunteering, seasonal hiring, and all sorts of opportunities present themselves for moving beyond your immediate circle of contacts. Pursue as many of these as you can that will comfortably allow you time for other holiday networking activities. You never know whom you might meet and where such opportunities may lead.

Most of all, remember that your goal is to take full advantage of the serendipity and good will that abounds in December. Join in the seasonal festivities, celebrate with your career goals in mind and anticipate that success may be only weeks away. You just might find yourself ringing in 2015 with a brand new job. And that’s a pretty great way to start off the New Year… with a big thanks to the holiday spirit!

Mary Eileen Williams is a Nationally Board Certified Career Counselor with a Master’s Degree in Career Development and twenty years’ experience assisting midlife jobseekers to achieve satisfying careers. Her book, Land the Job You Love: 10 Surefire Strategies for Jobseekers Over 50, is a step-by-step guide that shows you how you can turn your age into an advantage and brand yourself for success. Updated in 2014, it’s packed with even more critical information aimed at providing mature applicants with the tools they need to gain the edge over the competition and successfully navigate the modern job market. Visit her website at Feisty Side of Fifty.com and celebrate your sassy side!

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Don’t Leave Your Christmas Tree Up Too Long, Says Fire Organization

The National Fire Protection Association (NFPA) is suggesting that you don’t wait too long to take down your Christmas tree.

NFPA said 40% of home fires that start on a Christmas tree occur in January.

“The longer they are in the home, the more dangerous they become. The continued use of seasonal lighting and dried-out trees can pose significant fire hazards in and outside the home,” said Lorraine Carli, vice president of Outreach and Advocacy for NFPA. “Proper disposal of the tree from your home will minimize the risk and will keep the holiday a joyful one.”

Christmas tree fires are not common, but NFPA said those types of fires are more fatal than others.

NFPA said one of every 40 reported home fires started on a Christmas tree resulted in death compared to one death per 142 on all home fires.

NFPA gives these tips:

When it’s time to dispose of the tree, check with your local community to find a recycling program.

Do not leave them in the home, garage, or placed outside.

For unplugging the electric decorations, use the gripping area provided on the plugs. Never pull the cord to unplug a device from electrical outlets. Doing so can harm the cord’s wire and insulation, which can lead to an electrical fire or shock.

To reduce the risk of holiday tree and light fires and to keep decorations in good condition for next year, you should also follow these suggestions:

  • As you’re putting away electrical light strings, take time to inspect each for damage. Throw out light sets if they have loose connections, broken sockets or cracked or bare wires.
  • Do not place a damaged set of lights back into the storage box for next year’s use.
  • Wrap each set of lights and put them in individual plastic bags, or wrap the lights around a piece of cardboard.
  • Store electrical decorations in a dry place where they cannot be damaged by water or dampness. Also, keep them away from children and pets.