As part of the National Association of Insurance Commissioners’ (NAIC’s) “Get Smart” program, the Louisiana Department of Insurance is encouraging consumers to “Get Even Smarter” about their insurance coverage at the start of 2006.
The department noted that the 2005 hurricane season served as a wake up call for people educate themselves about what insurance they should have on their homes and automobiles.
“Until something goes wrong, most of us are content just to know we have insurance, even though we don’t necessarily understand what all is covered in our policies,” Louisiana Commissioner of Insurance Robert Wooley said. “Not knowing exactly what is in your insurance policies could leave you with the wrong insurance or less coverage than you need when a loss occurs.”
Wooley said consumers who were not required by their mortgage lender to purchase flood insurance when they bought their homes should not assume their property won’t be damaged due to flood.
“Homeowners insurance doesn’t cover flooding, so a separate flood insurance policy must be purchased if you want that coverage,” the commissioner warned.
Consumers can also buy a flood insurance contents policy to cover their furniture, clothing and other items that could be lost if their home is flooded.
Excess flood insurance coverage is also available for homeowners needing more than the NFIP flood policy limit of $250,000 on the home and $100,000 on contents.
“For coverage above $250,000/$100,000, contact your insurance agent or company and ask about purchasing excess flood insurance on your home and on its contents through a private insurance company,” Wooley said.
Other levels of coverage to look for in homeowners insurance policies include whether your home or your contents are insured for their actual cash value, which is the replacement cost minus depreciation, or for the replacement cost, which is the actual cost without deducting for depreciation.
The department offered more ways for consumers to “Get Smart” about insurance:
-Call the Department of Insurance at 1-800-259-5300 or visit its Web site, www.ldi.state.la.us. Click on the “Get Smart” icon for tips and up-to-date information about health, life, auto, home or other insurance coverage.
-Schedule a routine “check-up” with your insurance providers at least once a year. Inquire about the cost benefit of opting for higher deductibles. Ask specifically about discounts for good driving records, good health, good grades and special education or training.
-Shop around for identical products and services. Not every company charges the same rate. Remember, an insurance policy is a legal document. Read it carefully.
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